CALIFORNIA DEALER LICENSE PRACTICE EXAM 200 VERIFIED
QUESTIONS WITH RATIONALES COVERING ALL DMV VEHICLE CODE
REQUIREMENTS – INCLUDING LICENSING, BONDING, ADVERTISING,
DISCLOSURES, ODOTER RULES, SALE CONTRACTS, CONSIGNMENT,
AND CONSUMER PROTECTION LAWS
1. Under what circumstances shall a dealer's license and special plates
be automatically canceled?
A. If the dealer changes business locations
B. If the dealer fails to maintain an adequate bond
C. If the dealer sells a vehicle with a branded title
D. If the dealer fails to display a buyers guide
Correct Answer: B
Rationale: Automatic cancellation occurs when the dealer abandons the
established place of business, fails to maintain an adequate bond, or the
CDFTA resale permit is suspended.
2. What must a dealer affix to all vehicles offered for sale?
A. A temporary operating permit
B. A dealer's special plate
C. A federal trade commission buyers guide
D. A smog certificate
Correct Answer: C
Rationale: Dealers are required to affix a Federal Trade Commission
Buyer's Guide to all vehicles offered for sale.
,3. What is the minimum total size requirement for a sign at a retail
dealer's place of business?
A. One square foot
B. Two square feet
C. Three square feet
D. Four square feet
Correct Answer: B
Rationale: Every retail dealer shall have a sign erected or posted with a
total size of not less than two square feet.
4. How often must a retail dealer maintain a proper display area?
A. During business hours only
B. At all times
C. Only when vehicles are in stock
D. Only during dealer inspections
Correct Answer: B
Rationale: Each retail dealer is required to maintain a proper display
area at all times.
5. Which of the following is NOT required at a licensed dealer
location?
A. An office for the exclusive use of the dealer
B. A sign indicating the name and address of the dealer
C. Signs on all vehicles indicating the main location address
D. A display area large enough to display the types of vehicles
,Correct Answer: C
Rationale: Signs on all vehicles indicating the main location address are
not required at a licensed dealer location.
6. A licensed dealer location must have all of the following EXCEPT:
A. An office for the exclusive use of the dealer
B. A sign indicating the name and address of the dealer
C. A display area large enough to display the types
D. A permanent telephone line in the dealer's name
Correct Answer: D
Rationale: The required items are an office, a sign, and a display area; a
telephone line is not listed as a requirement.
7. If a dealer changes the site or location of his established place of
business, when must he notify the department?
A. Within 10 days
B. Within 30 days
C. Immediately
D. Before the next business day
Correct Answer: C
Rationale: The dealer shall notify the department immediately upon
changing location.
8. What is the basic fee for transfer of ownership on a California
registered vehicle?
, A. $10
B. $15
C. $20
D. $25
Correct Answer: B
Rationale: The basic fee for transfer of ownership on a California
registered vehicle is $15.
9. When must a dealer provide a disclosure statement for a vehicle
branded "Lemon law buyback"?
A. At the time of delivery
B. Prior to the sale of the vehicle
C. Within 48 hours after sale
D. Only if the buyer requests it
Correct Answer: B
Rationale: Any dealer who sells a vehicle with a "Lemon law buyback"
title must provide a disclosure statement to the buyer prior to the sale.
10. Is it legal to reset the odometer reading on a vehicle?
A. Yes, with buyer's consent
B. Yes, if the vehicle is over 10 years old
C. It is never legal to reset the odometer reading
D. Yes, if the dealer discloses the original reading
Correct Answer: C
Rationale: It is never legal to reset an odometer reading under any
circumstances.
QUESTIONS WITH RATIONALES COVERING ALL DMV VEHICLE CODE
REQUIREMENTS – INCLUDING LICENSING, BONDING, ADVERTISING,
DISCLOSURES, ODOTER RULES, SALE CONTRACTS, CONSIGNMENT,
AND CONSUMER PROTECTION LAWS
1. Under what circumstances shall a dealer's license and special plates
be automatically canceled?
A. If the dealer changes business locations
B. If the dealer fails to maintain an adequate bond
C. If the dealer sells a vehicle with a branded title
D. If the dealer fails to display a buyers guide
Correct Answer: B
Rationale: Automatic cancellation occurs when the dealer abandons the
established place of business, fails to maintain an adequate bond, or the
CDFTA resale permit is suspended.
2. What must a dealer affix to all vehicles offered for sale?
A. A temporary operating permit
B. A dealer's special plate
C. A federal trade commission buyers guide
D. A smog certificate
Correct Answer: C
Rationale: Dealers are required to affix a Federal Trade Commission
Buyer's Guide to all vehicles offered for sale.
,3. What is the minimum total size requirement for a sign at a retail
dealer's place of business?
A. One square foot
B. Two square feet
C. Three square feet
D. Four square feet
Correct Answer: B
Rationale: Every retail dealer shall have a sign erected or posted with a
total size of not less than two square feet.
4. How often must a retail dealer maintain a proper display area?
A. During business hours only
B. At all times
C. Only when vehicles are in stock
D. Only during dealer inspections
Correct Answer: B
Rationale: Each retail dealer is required to maintain a proper display
area at all times.
5. Which of the following is NOT required at a licensed dealer
location?
A. An office for the exclusive use of the dealer
B. A sign indicating the name and address of the dealer
C. Signs on all vehicles indicating the main location address
D. A display area large enough to display the types of vehicles
,Correct Answer: C
Rationale: Signs on all vehicles indicating the main location address are
not required at a licensed dealer location.
6. A licensed dealer location must have all of the following EXCEPT:
A. An office for the exclusive use of the dealer
B. A sign indicating the name and address of the dealer
C. A display area large enough to display the types
D. A permanent telephone line in the dealer's name
Correct Answer: D
Rationale: The required items are an office, a sign, and a display area; a
telephone line is not listed as a requirement.
7. If a dealer changes the site or location of his established place of
business, when must he notify the department?
A. Within 10 days
B. Within 30 days
C. Immediately
D. Before the next business day
Correct Answer: C
Rationale: The dealer shall notify the department immediately upon
changing location.
8. What is the basic fee for transfer of ownership on a California
registered vehicle?
, A. $10
B. $15
C. $20
D. $25
Correct Answer: B
Rationale: The basic fee for transfer of ownership on a California
registered vehicle is $15.
9. When must a dealer provide a disclosure statement for a vehicle
branded "Lemon law buyback"?
A. At the time of delivery
B. Prior to the sale of the vehicle
C. Within 48 hours after sale
D. Only if the buyer requests it
Correct Answer: B
Rationale: Any dealer who sells a vehicle with a "Lemon law buyback"
title must provide a disclosure statement to the buyer prior to the sale.
10. Is it legal to reset the odometer reading on a vehicle?
A. Yes, with buyer's consent
B. Yes, if the vehicle is over 10 years old
C. It is never legal to reset the odometer reading
D. Yes, if the dealer discloses the original reading
Correct Answer: C
Rationale: It is never legal to reset an odometer reading under any
circumstances.
