California Dealer License Exam
Questions And Correct Answers| 2026
Updated
“A dealer's license and special plates shall be automatically canceled if: - CORRECT
ANSWER The dealer abandons the established place of business, The dealer fails to
maintain an adequate bond, and The CDTFA resale permit is suspended"
"A dealer must affix to all vehicles offered for sale: - CORRECT ANSWER A federal trade
commission buyers guide"
"All the agreements of the buyer and seller with respect to the total cost and terms of
payment must be contained in a single document. That document is: - CORRECT
ANSWER The conditional sales contract"
"Which legal actions may be taken against a dealer if they violate the laws, rules and
regulations related to their licensed activity? - CORRECT ANSWER Administrative
action, Criminal action, and Civil action"
"Within 20 days after the sale of a consigned vehicle the dealer must notify the consigner of:
- CORRECT ANSWER The date of sale, The amount of any lien payable to the lienholder,
and The total sales price"
"A California law does not provide an included "cooling off "period or other cancellation
period for vehicle sales. The only exception is: - CORRECT ANSWER For legal cause
such as fraud or with the agreement of the seller"
"As the selling dealer, you may allow the customer to take the vehicle to get their own smog
certificate: - CORRECT ANSWER You may never allow the customer to take the vehicle
to get their own smog certificate"
"Of the following used vehicle sale prices, which would a dealer not be required to offer a
contract cancellation option agreement? - CORRECT ANSWER $52,995"
"What is the maximum markup that dealers may add to a loan for their ówn profit? -
CORRECT ANSWER 2.5% on loans 60 or fewer months, 2% on loans 60 months or
more"
1
,"Effective July 1, 2006, dealers who advertise a vehicle as "certified" will be in violation of
the law if the vehicle they are referring to in the ad has the following history: - CORRECT
ANSWER Salvage and Frame damage"
"Which documents are used to disclose the total cost and terms of payment? - CORRECT
ANSWER The conditional sales contract"
"Before you can apply for your dealer license, you need to get a resale permit (seller's
permit) from where? - CORRECT ANSWER The CDFTA"
"What is required in every dealer's advertisement for a vehicle for sale? - CORRECT
ANSWER Make and model, Last 6 of the VIN, Dealership name"
"What is the purpose of Division 12 of the Vehicle Code? - CORRECT ANSWER
Regulates the manner in which vehicles are equipped for safe operation"
"How many cars can a private individual legally sell per year with the intent to make a
profit? - CORRECT ANSWER None"
"California dealer advertising laws apply to which, of the following media types: -
CORRECT ANSWER All forms of media"
"What must a dealer do when selling vehicles at temporary location? - CORRECT
ANSWER Apply for a "Temporary Branch Location""
"How much notice is required when applying for a temporary branch location? -
CORRECT ANSWER 30 Days"
"After return of the vehicle under the cancellation option rules, how soon must the dealer
make refund to the customer? - CORRECT ANSWER Within 48 Hours"
"Which person can use inventory vehicle with the dealer plate 24/7 for personal use? -
CORRECT ANSWER Dealer Owner"
"What is the proper location to place the dealer plate while on a test drive? - CORRECT
ANSWER In place of rear license plate"
2
, "Which of the following statements is correct regarding dealer plates? - CORRECT
ANSWER Dealer plates may be used for any purpose by the dealer"
"Which of the following signs has to be posted in dealership office? - CORRECT
ANSWER No cooling off period & Vehicle inspection signs, Business License, Seller's
Permit, Dealer License, Salesperson's license(s)"
"What is the minimum passing score for the DMV Exam? - CORRECT ANSWER 70%"
"What is the DMV dealer test fee? - CORRECT ANSWER $16"
"What is the number of vehicles you can sell per year without a valid license? - CORRECT
ANSWER 0"
"What is the required bond or cash amount? - CORRECT ANSWER 50,000"
"If you post cash, how many years after you close will the DMV hold your money? -
CORRECT ANSWER 3 years"
"What is the maximum distance between your retail display area and your office? -
CORRECT ANSWER 1000 ft"
"What is the minimum square footage of the retail dealer sign? - CORRECT ANSWER 2
feet"
"What is the minimum distance the sign can be read from? - CORRECT ANSWER 50
feet"
"What is the original application fee? - CORRECT ANSWER $175"
"What is the renewal application fee? - CORRECT ANSWER $125"
"What is the permanent or temporary branch location fee? - CORRECT ANSWER $70"
"What is the processing fee for the Livescan fingerprint card? - CORRECT ANSWER
$44"
3
Questions And Correct Answers| 2026
Updated
“A dealer's license and special plates shall be automatically canceled if: - CORRECT
ANSWER The dealer abandons the established place of business, The dealer fails to
maintain an adequate bond, and The CDTFA resale permit is suspended"
"A dealer must affix to all vehicles offered for sale: - CORRECT ANSWER A federal trade
commission buyers guide"
"All the agreements of the buyer and seller with respect to the total cost and terms of
payment must be contained in a single document. That document is: - CORRECT
ANSWER The conditional sales contract"
"Which legal actions may be taken against a dealer if they violate the laws, rules and
regulations related to their licensed activity? - CORRECT ANSWER Administrative
action, Criminal action, and Civil action"
"Within 20 days after the sale of a consigned vehicle the dealer must notify the consigner of:
- CORRECT ANSWER The date of sale, The amount of any lien payable to the lienholder,
and The total sales price"
"A California law does not provide an included "cooling off "period or other cancellation
period for vehicle sales. The only exception is: - CORRECT ANSWER For legal cause
such as fraud or with the agreement of the seller"
"As the selling dealer, you may allow the customer to take the vehicle to get their own smog
certificate: - CORRECT ANSWER You may never allow the customer to take the vehicle
to get their own smog certificate"
"Of the following used vehicle sale prices, which would a dealer not be required to offer a
contract cancellation option agreement? - CORRECT ANSWER $52,995"
"What is the maximum markup that dealers may add to a loan for their ówn profit? -
CORRECT ANSWER 2.5% on loans 60 or fewer months, 2% on loans 60 months or
more"
1
,"Effective July 1, 2006, dealers who advertise a vehicle as "certified" will be in violation of
the law if the vehicle they are referring to in the ad has the following history: - CORRECT
ANSWER Salvage and Frame damage"
"Which documents are used to disclose the total cost and terms of payment? - CORRECT
ANSWER The conditional sales contract"
"Before you can apply for your dealer license, you need to get a resale permit (seller's
permit) from where? - CORRECT ANSWER The CDFTA"
"What is required in every dealer's advertisement for a vehicle for sale? - CORRECT
ANSWER Make and model, Last 6 of the VIN, Dealership name"
"What is the purpose of Division 12 of the Vehicle Code? - CORRECT ANSWER
Regulates the manner in which vehicles are equipped for safe operation"
"How many cars can a private individual legally sell per year with the intent to make a
profit? - CORRECT ANSWER None"
"California dealer advertising laws apply to which, of the following media types: -
CORRECT ANSWER All forms of media"
"What must a dealer do when selling vehicles at temporary location? - CORRECT
ANSWER Apply for a "Temporary Branch Location""
"How much notice is required when applying for a temporary branch location? -
CORRECT ANSWER 30 Days"
"After return of the vehicle under the cancellation option rules, how soon must the dealer
make refund to the customer? - CORRECT ANSWER Within 48 Hours"
"Which person can use inventory vehicle with the dealer plate 24/7 for personal use? -
CORRECT ANSWER Dealer Owner"
"What is the proper location to place the dealer plate while on a test drive? - CORRECT
ANSWER In place of rear license plate"
2
, "Which of the following statements is correct regarding dealer plates? - CORRECT
ANSWER Dealer plates may be used for any purpose by the dealer"
"Which of the following signs has to be posted in dealership office? - CORRECT
ANSWER No cooling off period & Vehicle inspection signs, Business License, Seller's
Permit, Dealer License, Salesperson's license(s)"
"What is the minimum passing score for the DMV Exam? - CORRECT ANSWER 70%"
"What is the DMV dealer test fee? - CORRECT ANSWER $16"
"What is the number of vehicles you can sell per year without a valid license? - CORRECT
ANSWER 0"
"What is the required bond or cash amount? - CORRECT ANSWER 50,000"
"If you post cash, how many years after you close will the DMV hold your money? -
CORRECT ANSWER 3 years"
"What is the maximum distance between your retail display area and your office? -
CORRECT ANSWER 1000 ft"
"What is the minimum square footage of the retail dealer sign? - CORRECT ANSWER 2
feet"
"What is the minimum distance the sign can be read from? - CORRECT ANSWER 50
feet"
"What is the original application fee? - CORRECT ANSWER $175"
"What is the renewal application fee? - CORRECT ANSWER $125"
"What is the permanent or temporary branch location fee? - CORRECT ANSWER $70"
"What is the processing fee for the Livescan fingerprint card? - CORRECT ANSWER
$44"
3
