CAR DEALER LICENSE TEST QUESTIONS WITH
VERIFIED ACCURATE ANSWERS
To obtain a dealer license, you must obtain a surety bond for what amount? - Answers -
$50,000 or $10,000
Which type of dealer is permitted to have a $10,000.00 bond? - Answers - Wholesale
dealer selling less than 25 vehicles per year
An occupational license is valid for how long? - Answers - 2 years
A dealer's office must have all of the following except - Answers - It must be located in
the county where the buyer lives
Which of the following are required for dealership signs? - Answers - Each retail
dealership must have a sign not less than 2 feet square that can be read from 50 feet
awaY
All dealers must have a display area except: - Answers - Wholesale dealers
The dealership display area must: - Answers - Be for the exclusive use of the dealer for
display purposes only
When is a branch license required? - Answers - When vehicles are displayed and sold
more than 1000 feet from the
main dealership office✅
Auto Brokers must do which of the following: - Answers - Write all brokered sales into
the dealer's auto broker log
Auto brokers must also do which of the following - Answers - Limit deposits to 2.5% of
the purchase price, and put all deposits in a separate trust account
If a dealer sells a vehicle on consignment, the dealer must do which of the
following: - Answers - Provide the consignor (the selling owner) a written accounting
within 20 days of the sale date showing where the money went
Which of the following are permitted methods for computing interest rates? - Answers -
a. The Pre-Computed Basis Method
b. The Simple Interest Basis Method
c. Both a and b✅
A dealer can charge which of the following document preparation fees? - Answers -
$85.00 if the dealer uses a Business Partner Automation registration
, service
c. $70.00 if the dealer uses Fairfax Imaging to process their
registration documents
d. Both b and c✅
If the buyer defaults on a Conditional Sales Contract (stops making the
payments), the dealer may, with proper notification to the buyer: - Answers - a.
Accelerate amount due
b. Repossess vehicle
c. Sell vehicle
d. All of the above✅
If the dealer is a Buy Here Pay Here dealer (financing their own vehicles), the
dealer must: - Answers - Put a decal on the vehicle stating the reasonable market value
of the
vehicle✅
Is it ever permissible for a dealer to use GPS to track a vehicle? - Answers - Yes, upon
proper notice to the buyer, including in the contract and a 10
day notice✅
Which of the following are taxable in a vehicle sales transaction? - Answers - a.
Document preparation fee
b. Smog fee paid to seller (not including certificate issuing fee paid to the
State)
c. Both a and b✅
When selling a vehicle to a California resident, the tax is based upon: - Answers - The
county where the buyer lives✅
An out-of-state buyer may avoid California sale tax if: - Answers - b. The buyer takes
delivery outside of California
c. The vehicle is delivered outside of California by a certified common
carrier transport business
d. Both b and c✅
A dealer must use which of the following systems to file their Reports of Sale
online? - Answers - a. A DMV Approved Business Partner Automation (BPA) System
Provider
b. Fairfax Software
d. Either a or b✅
When must dealers electronically submit their Reports of Sale forms? - Answers - c. On
the date of sale✅
VERIFIED ACCURATE ANSWERS
To obtain a dealer license, you must obtain a surety bond for what amount? - Answers -
$50,000 or $10,000
Which type of dealer is permitted to have a $10,000.00 bond? - Answers - Wholesale
dealer selling less than 25 vehicles per year
An occupational license is valid for how long? - Answers - 2 years
A dealer's office must have all of the following except - Answers - It must be located in
the county where the buyer lives
Which of the following are required for dealership signs? - Answers - Each retail
dealership must have a sign not less than 2 feet square that can be read from 50 feet
awaY
All dealers must have a display area except: - Answers - Wholesale dealers
The dealership display area must: - Answers - Be for the exclusive use of the dealer for
display purposes only
When is a branch license required? - Answers - When vehicles are displayed and sold
more than 1000 feet from the
main dealership office✅
Auto Brokers must do which of the following: - Answers - Write all brokered sales into
the dealer's auto broker log
Auto brokers must also do which of the following - Answers - Limit deposits to 2.5% of
the purchase price, and put all deposits in a separate trust account
If a dealer sells a vehicle on consignment, the dealer must do which of the
following: - Answers - Provide the consignor (the selling owner) a written accounting
within 20 days of the sale date showing where the money went
Which of the following are permitted methods for computing interest rates? - Answers -
a. The Pre-Computed Basis Method
b. The Simple Interest Basis Method
c. Both a and b✅
A dealer can charge which of the following document preparation fees? - Answers -
$85.00 if the dealer uses a Business Partner Automation registration
, service
c. $70.00 if the dealer uses Fairfax Imaging to process their
registration documents
d. Both b and c✅
If the buyer defaults on a Conditional Sales Contract (stops making the
payments), the dealer may, with proper notification to the buyer: - Answers - a.
Accelerate amount due
b. Repossess vehicle
c. Sell vehicle
d. All of the above✅
If the dealer is a Buy Here Pay Here dealer (financing their own vehicles), the
dealer must: - Answers - Put a decal on the vehicle stating the reasonable market value
of the
vehicle✅
Is it ever permissible for a dealer to use GPS to track a vehicle? - Answers - Yes, upon
proper notice to the buyer, including in the contract and a 10
day notice✅
Which of the following are taxable in a vehicle sales transaction? - Answers - a.
Document preparation fee
b. Smog fee paid to seller (not including certificate issuing fee paid to the
State)
c. Both a and b✅
When selling a vehicle to a California resident, the tax is based upon: - Answers - The
county where the buyer lives✅
An out-of-state buyer may avoid California sale tax if: - Answers - b. The buyer takes
delivery outside of California
c. The vehicle is delivered outside of California by a certified common
carrier transport business
d. Both b and c✅
A dealer must use which of the following systems to file their Reports of Sale
online? - Answers - a. A DMV Approved Business Partner Automation (BPA) System
Provider
b. Fairfax Software
d. Either a or b✅
When must dealers electronically submit their Reports of Sale forms? - Answers - c. On
the date of sale✅
