DMV Dealer Pre-License Training
Questions with Correct Answers 2026-
2027
ANY of the following actions could result in a Dealer license suspension: - CORRECT ANSWER --
Misuse of Special (Dealer) Plates
- Bait & Switch advertising schemes
- Failure to pay Administrative Service Fees when due
- Submission of dishonored check to Department
- Selling at unlicensed locations
- Failure to transfer title
- Paying "Bird Dog" fees
The Guide must be in plain view (with both sides visible) and may be either: -
CORRECT ANSWER -- Hung from the rear-view mirror or outside side-view mirror
- Placed under a windshield wiper.
- Attached to a side window
A Guide in a glove compartment, trunk or under the seat is not conspicuous because it is not i
n plain sight.
What can the DMV, as well as State and Federal regulatory agencies do? - CORRECT ANSWER -
The DMV, as well as State and Federal regulatory agencies, can limit, suspend, or revoke a Deal
er's license and or impose penalties should they fail to abide by the laws and regulations gover
ning Dealers.
All Dealers must have a Surety Bond valued on their license type and provide proof: -
CORRECT ANSWER -- OL 25 New or Used Auto-Commercial Dealer ($50,000)
,- OL 25B Motorcycle Dealer, Motorcycle Lessor-Retailer, All-
Terrain Vehicle Dealer, or Wholesale-Only Dealer (Less Than 25 Vehicles Per Year) $10,000
Never advertise or sell as used car as "Certified" when the: - CORRECT ANSWER --
Odometer does not indicate the actual mileage of the vehicle.
-
Vehicle was reacquired by the manufacturer or dealer under state or federal warranty law (i.e.
"lemon law").
-
Vehicle was damaged by a collision, fire, or flood unless repaired to safe operational condition
prior to sale
- Title was branded as a lemon law buyback, manufacturer repurchase, salvage, junk, non-
repairable, or similar designation
- Vehicle has frame damage or was sold "as is"
If the odometer cannot register the same mileage as before the repair: - CORRECT ANSWER -
it must be adjusted to read "0" with a notice attached to the vehicle's left door frame (specifyi
ng the prior mileage and the date on which it was serviced, repaired, or replaced) by the perso
n performing the service or repair
Dealers must securely store their Reports of Sale at their principal place of business for -
CORRECT ANSWER -
and are required to "implement federal safeguard standards for storage" and maintain the reco
rds vehicle transaction for 90 days (was 18 months) at the principal place of business or branch
location.
After 3 months (90 days), use an offsite storage facility within the state or third-
party vendor to maintain records for a total storage requirement of 36 months / 3 years.
- Digital storage is acceptable after the initial 90 days
- DMV requested records must be provided within 3 business days
, California's "Car Buyer Bill of Rights" (AB 68) limits a Dealer's compensation from an institution
financing the purchase of a vehicle is limited to no more than: - CORRECT ANSWER --
2.5% for terms up to 60 months
- 2.0% for terms of 60 months or longer
This limitation does not apply when the assignment requires the Dealer to bear the entire risk G
of financial performance for the consumer or when the assignment is more than six months af
ter the date of the Conditional Sale Contract.
When a Dealer sells a Lemon Law buyback vehicle, they must notify the buyer on letter-
size paper of the following: - CORRECT ANSWER --
The year, make, model, and vehicle identification number
- That the vehicle title is marked "Lemon Law Buyback"
- The nature of each nonconformity reported by the vehicle's original buyer or lessee
- Any repairs made to the vehicle in an attempt to correct each nonconformity
Dealers should complete and submit the following to renew their license: -
CORRECT ANSWER -- Renewal Application (DMV form OL 45)
- Proof of Continuing Education (every two years)
- Proof of Surety Bond
- Payment of Renewal Fees
Who may operate a vehicle with special plates for any purpose? - CORRECT ANSWER -
(a) A sole owner, a general partner, a manager of a limited liability company, or a corporate offi
cer or director of a Dealer provided that individual is actively engaged in the management and
control of the Dealer's business operations
(b) A general manager, or business manager, or sales manager who is actively engaged in the
management and control of the business operations of the Dealer when no other individual m
eets the criteria in (a) above
(c) A driver -if- an individual identified in section (b) is also in the vehicle.
Questions with Correct Answers 2026-
2027
ANY of the following actions could result in a Dealer license suspension: - CORRECT ANSWER --
Misuse of Special (Dealer) Plates
- Bait & Switch advertising schemes
- Failure to pay Administrative Service Fees when due
- Submission of dishonored check to Department
- Selling at unlicensed locations
- Failure to transfer title
- Paying "Bird Dog" fees
The Guide must be in plain view (with both sides visible) and may be either: -
CORRECT ANSWER -- Hung from the rear-view mirror or outside side-view mirror
- Placed under a windshield wiper.
- Attached to a side window
A Guide in a glove compartment, trunk or under the seat is not conspicuous because it is not i
n plain sight.
What can the DMV, as well as State and Federal regulatory agencies do? - CORRECT ANSWER -
The DMV, as well as State and Federal regulatory agencies, can limit, suspend, or revoke a Deal
er's license and or impose penalties should they fail to abide by the laws and regulations gover
ning Dealers.
All Dealers must have a Surety Bond valued on their license type and provide proof: -
CORRECT ANSWER -- OL 25 New or Used Auto-Commercial Dealer ($50,000)
,- OL 25B Motorcycle Dealer, Motorcycle Lessor-Retailer, All-
Terrain Vehicle Dealer, or Wholesale-Only Dealer (Less Than 25 Vehicles Per Year) $10,000
Never advertise or sell as used car as "Certified" when the: - CORRECT ANSWER --
Odometer does not indicate the actual mileage of the vehicle.
-
Vehicle was reacquired by the manufacturer or dealer under state or federal warranty law (i.e.
"lemon law").
-
Vehicle was damaged by a collision, fire, or flood unless repaired to safe operational condition
prior to sale
- Title was branded as a lemon law buyback, manufacturer repurchase, salvage, junk, non-
repairable, or similar designation
- Vehicle has frame damage or was sold "as is"
If the odometer cannot register the same mileage as before the repair: - CORRECT ANSWER -
it must be adjusted to read "0" with a notice attached to the vehicle's left door frame (specifyi
ng the prior mileage and the date on which it was serviced, repaired, or replaced) by the perso
n performing the service or repair
Dealers must securely store their Reports of Sale at their principal place of business for -
CORRECT ANSWER -
and are required to "implement federal safeguard standards for storage" and maintain the reco
rds vehicle transaction for 90 days (was 18 months) at the principal place of business or branch
location.
After 3 months (90 days), use an offsite storage facility within the state or third-
party vendor to maintain records for a total storage requirement of 36 months / 3 years.
- Digital storage is acceptable after the initial 90 days
- DMV requested records must be provided within 3 business days
, California's "Car Buyer Bill of Rights" (AB 68) limits a Dealer's compensation from an institution
financing the purchase of a vehicle is limited to no more than: - CORRECT ANSWER --
2.5% for terms up to 60 months
- 2.0% for terms of 60 months or longer
This limitation does not apply when the assignment requires the Dealer to bear the entire risk G
of financial performance for the consumer or when the assignment is more than six months af
ter the date of the Conditional Sale Contract.
When a Dealer sells a Lemon Law buyback vehicle, they must notify the buyer on letter-
size paper of the following: - CORRECT ANSWER --
The year, make, model, and vehicle identification number
- That the vehicle title is marked "Lemon Law Buyback"
- The nature of each nonconformity reported by the vehicle's original buyer or lessee
- Any repairs made to the vehicle in an attempt to correct each nonconformity
Dealers should complete and submit the following to renew their license: -
CORRECT ANSWER -- Renewal Application (DMV form OL 45)
- Proof of Continuing Education (every two years)
- Proof of Surety Bond
- Payment of Renewal Fees
Who may operate a vehicle with special plates for any purpose? - CORRECT ANSWER -
(a) A sole owner, a general partner, a manager of a limited liability company, or a corporate offi
cer or director of a Dealer provided that individual is actively engaged in the management and
control of the Dealer's business operations
(b) A general manager, or business manager, or sales manager who is actively engaged in the
management and control of the business operations of the Dealer when no other individual m
eets the criteria in (a) above
(c) A driver -if- an individual identified in section (b) is also in the vehicle.
