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USED MOTOR VEHICLE DEALER EDUCATION ONLINE STUDY GUIDE


Continuing Education Edition
Certified For Use By The California- Department Of Motor Vehicles

TriStar Motors, L. L. C. -
www.gotplates.com San Francisco, California 2005

USING THE ONLINE STUDY GUIDE

  1. Please choose from the topics to your left

  2. Or Scroll down the page to review the different sections

  3. For additional information and links about a given topic you are reviewing, simply mouse over the Did You Know icon which is located throughout the Study Guide.

  4. On many topics we also provide you with helpful links to sites and forms that we feel might be a useful resource for you - feel free to bookmark these sites as you go along.



LESSON PLAN OUTLINE

We will provide you a complete course of instruction.
As a renewal dealer:
  • You must take a minimum of four hours to complete the online dealer education curriculum and examination as stated by the DMV
  • The examine usually takes about 60 minutes to complete.
  • Please check in the FAQ area for explanations on how to operate within current DMV guidelines.
  • Upon completion we will provide you with a DMV certificate of completion
We now have three methods to teach you:
  • In-Person with discussion and testing
  • Home Study with testing and written review
  • On Line with discussion, testing and review
  • Renewals are mandatory every TWO years.
A 70 % score is needed to pass the dealer examination.
  • All materials provided, including study materials and handbook.
  • Licensed Sales Persons may attend on behalf of the owner.
  • We will need to a copy of your existing dealer license along with a valid Calif. DL or ID and Salespersons License, if appropriate.

    TriStar Motors, L.L.C.
    1601 Folsom Street
    San Francisco, California, 94103
    Attention: Al, Joe, Kevin & Willis

    1-800-901-5950 schedule information & paging
    1-888-948-1795 reservation fax machine
    jw974@juno.com e - mail
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DEALER LICENSING

Bond Posting and Information
No person shall act as a dealer without having first been issued:
A Dealer license or a temporary permit.
A dealer must post a bond of $ 50,000. prior to license being issued.
An unpaid ASF can result in bond activation and loss of license.
A lesser bond of $ 10,000. is allowed for wholesale only if:
fewer than 25 sales annually.
  • In lieu of posting a bond a dealer may deposit cash with the DMV or with an approved FDIC bank or savings and loan.
  • This deposit shall be held 3 years after license is retired. With no claims outstanding, the deposit is returned.
  • It is unlawful to operate w/o having a bond in effect. The office of the principal place of business, and each branch location, must be established prior to license issuance. Photo set of each required.
  • Temporary, transitory & mobile offices are acceptable, provided items are not a part of the inventory for sale.
  • All records must be kept at the place of business. (4 years)
  • The display area of each location, required for retail locations, must comply as follows:
    It must be of sufficient size to accommodate each type of vehicle the dealer is licensed to sell and be clearly marked for exclusive use. Display areas must be within 1000 ft. of the office.
  • See Dealer Surety Bond Forms
Permanent signage required for retail locations sufficient to withstand weather. A temporary sign is allowed with a permanent sign on order.
  • It shall have an area of at least two ( 2 ) square feet per side.
    It shall be able to be read from a distance of fifty ( 50 ) feet.
  • At each location the dealer must post the dealer's license.
At each location the dealer must post the sales license(s)
The sales license fee is $ 93. with no test, good for three years.
Notice Posting
Every retail dealer, at each location, shall post a notice, at least 8" by 10", which states:

"The prospective purchaser of any vehicle may, at his or her own expense, and with the approval of the dealer, have the vehicle inspected by an independent third party, either on or off the premises."
Every retail dealer, at each location, in each sales office, at each desk where terms of sales or lease transactions are discussed, shall post a notice at least 8" by 10" which states:

California law does NOT provide for a "cooling off" or cancellation period for vehicle purchase or lease contracts. THEREFORE, You cannot later cancel such a contract simply because you change your mind, decide the vehicle costs too much, or wish you had acquired a different vehicle. After you sign a motor vehicle purchase or lease contract, it may only be canceled with the agreement of the seller or lessor OR for legal causes such as fraud.
Permanent signage required for retail locations sufficient to withstand weather. A temporary sign is allowed with a permanent sign on order.
It shall have an area of at least two ( 2 ) square feet per side. It shall be able to be read from a distance of fifty ( 50 ) feet.
At each location the dealer must post the dealer's license.
At each location the dealer must post the sales license(s)
The sales license fee is $ 93. with no test, good for three years.
Fee Schedule
  Initial Fees Renewals Late Penalty
Original Application $ 151. $ 101. $ 150.
Each Branch License $ 70. $ 70. $ 70.
Each Fingerprint Card $ 42. -0- -0-
Each Dealer Plate * $ 41. $ 41. $ 3. 1-10 days
      $ 6. 11-30 days
Renewal fees are due annually and must be paid by the expiration date. You may renew within 30 days after expiration, with penalty as listed above. After 30 days, NO renewal means NO more license.
  • Some counties impose additional fees for dealer plates.

  • Every dealer must complete a 4 hour continuing education course, once every two years, prior to license renewal. Only those dealers who are wholesale only, selling fewer than 50 cars per year are exempt.

  • Along with renewal notice send the original continuing education certificate of completion to:

      DMV Occupational Licensing
      PO Box 932342
      Sacramento, CA, 94232 - 3420


  • See Continuing Education Exemption Form
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Dealer Notification
Every dealer shall notify DMV:
  • 10 days prior to the effective date of an ownership change.
  • 30 days prior to the effective date of any corporate change.
  • $ 70. is the fee for a corporate change.
If there has been an ownership or corporate change, the dealer will need to submit a new original application and fees, along with a new dealer bond. Once the application is completed, the dealer will be issued a new dealer number.
If there is a corporate officer change, an OL-15, Application, Personal History Questionnaire, Livescan and a fee of $ 70.
Any change in the dealer address, be it branch add or removal, name change, add or delete category, add autobroker, dealer type change. or location change requires immediate notification to the Inspector of jurisdiction, an application and fees posted prior to change.
Dealer license & plates automatically & immediately cancel whenever:
  • Change of the established place of business is made w/o notice.
  • Established place of business is abandoned w/o notice.
  • Bond is not maintained.
  • Inadequate bond is not replaced or restored.
  • Voluntary surrender of speial plates & license.
  • Involuntary surrender of special plates & license.
  • Failure to notify DMV new person designated as licensee.
  • Suspension or revocation by the Secretary of State.
  • Suspension or revocation by the Board of Equalization.

BROKER AND CONSIGNMENT LICENSING

Licensed Dealers may be auto brokers.
An auto broker must complete a written agreement with a customer prior to arranging a sale through another dealer.

The agreement must clearly indicate the broker fee.

The broker fee can be paid by the selling dealer or buyer.
The autobroker endorsement fee for this license is:
   - $ 50. the first year, $ 25. for renewal.

The broker must maintain a log of each brokered transaction.
See Related Links:
- DMV Brokering Agreement: Form and Contents
- Auto Broker Log
- DMV Consignment Form Requirements
A consignment is an arrangement under which a dealer agrees to accept possession for the purpose of sale and the owner will then pay the dealer from the proceeds of the sale.
Auto consignors must be licensed dealers.

Auto consignors must write an agreement prior to sale.

Auto consignors must complete an accounting and make payment within 20 days of the date of sale.

Failure to complete and/or comply with the terms of the agreement or failure to pay the consignor within 20 days of the sale is cause for suspension and/or revocation of the dealer's license.

The consignment agreement shall include:
vehicle description  
date of agreement  
current market value *low book value
liens outstanding  
repairs to be made *repairs to be left as-is and disclosed compensation to
  consignor


The sales accounting, within 20 days, shall include:
  • date of sale
  • repairs authorized with records
  • liens payable to lienholders
  • evidence of payment of liens
  • total sales price
  • PERMANENT BRANCH LOCATIONS

    A dealer branch is any location beside the principal location which is maintained for the sale and/or exchange of motor vehicles.
    Branch license required when retail vehicles are offered for sale.
    Any attempt, solicitation or negotiation at the location requires a license.
    On all reports of sale from a branch location the dealer shall use that location and not his principal location address.
       *Taxes are distributed by point of sale & county of residence.
    The dealer shall submit to DMV a branch application, with a fee of $ 70.
    All permanent branch locations must provide with application:

    OFFSITE SALES / TEMP BRANCH LOCATIONS

    An offsite sales license is needed when a dealer, at a location used for a limited duration, intends to engage in motor vehicle sales. These sales are handled as temporary branch location sales.
    All temporary branch locations must provide with application, ten days prior to opening, to the Inspector of jurisdiction:
    Copy of lease, rental agreement
    Copy of promoter's notice
    Zoning verification letter
    Photo set of location and office
    See Related Links:
    - Application for Temporary Branch Form
    - Zoning Verification Letter
    - Photo Set Procedures
    The branch location must have:
    Sign of two square feet readable from 50 feet with dealer name and permanent license address posted Temporary permit, Salesperson licenses, No Cooling Off and Vehicle Inspection Notice signs posted Display area independent of other dealers with no other vehicles. No parking of public or employee vehicles in display area
    A branch license is not required when:
    Motor vehicles are displayed on a temporary basis at a location such as a public shopping mall, an exhibition or similar exhibit provided the dealer meets the following provisions :

    The vehicle display is less than 30 days and No sales are offered. No consideration, deposit or trade-in to be accepted. Location must be of a type available to all dealers. The dealer shall, display a sign, including the dealer's name and principal location. with the statement :

    No sales permitted and no deposits accepted at this location.
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    CONDITIONAL SALES CONTRACT

    The contract definition derives from California civil code section 2981.
    "Any contract for the sale of a motor vehicle between a buyer and seller under which possession is delivered to the buyer and seller and either:
    (a) the title vests in the buyer thereafter only upon the payment of all or a part of the price, or the performance of any other condition, or
    (b) a lien in the property is to vest in the seller as security for the payment of part or all of the price, or for the performance of any other condition."
    A successful sale is a process involving a certain order of events.
    A sale made in the wrong order may "unwind" a sale.
    A sales tax refund is allowed if the buyer does not take possession.
    All contracts for purchase of a motor vehicle must be in writing. The contract must be contained in a single document.
    We recommend contracts containing "California Judicial Council" stamp.
    The contract must contain all agreements of the buyer and seller with respect to the total cost and terms of repayment for the motor vehicle. This shall include any evidences of indebtedness, including a promissory note.
    All contracts for the purchase of a motor vehicle must be signed by both buyer and seller and delivered to the buyer.
  • A contract signed by the dealer only is called a purchase order.
  • A Spanish copy, blank, attached to the original for Spanish speakers.
  • All contracts for the purchase of a motor vehicle require certain disclosures as per the civil code and federal regulation z.
    These items must be disclosed on the sales contract:
    Itemization Of Amount To Be Financed
    cash price * w/ demand of title price + tax only
    document prep fee $ 45. maximum. ( same for ALL )
    smog fee $ 50. maximum for inspection
    $ 8.25 maximum for certificate
    sales tax based on county of residence
    service contract charge only if sold by dealer ( extra warranty )
    Amounts Paid To DMV
    license fee $ 15.
    registration fee collect if:
    registration expired or within 60 days
    dealer pays to date of sale
    buyer pays forward
    to estimate .2.2% + $ 60. x .40
    Dealer Hotline 800.777.0133
    Amounts Paid For Insurance Premiums * only if sold by dealer
    Down Payment Total
    trade-in allowance describe vehicle & subtract payoff
    deferred down payment paid within 30 days * no post dated checks
    cash amount paid on date of contract
    Total Amount Financed * must match Amount Financed below.
    These items must be disclosed on the sales contract per federal law:
    • Annual Percentage Rate
    • Finance Charge
    • Amount Financed
      * must match Total Amount Financed above.
    • Total Of Payments
    • Total Sales Price
    • Payment Schedule
    Back to Top
    Refunds
    A refund of any and all moneys paid by purchaser shall be made by the dealer when the purchaser elects not to sign the contract.
    • Deposits do not give the dealer ANY advantage.
    • Even if the purchaser signs the contract and pays for the vehicle the sale does not transact until the purchaser takes delivery of the vehicle.
    Remember: Seller signs, Buyer signs, Buyer gets copy, Seller gets cash.
    The civil code and federal truth in lending regulations apply to all dealer transactions.
    A printed contract form from a law form supply house is required.
    The dealer may repossess w/o notice if the buyer defaults.
    *We suggest you keep a set of KEYS for each vehicle under contract.
    Contract Breach
    A dealer breach nullifies the contract and the dealer is required to refund any and all moneys.
    • Do not deliver the vehicle until all contract items have been done.
    • A dealer DO list carries a liability and leaves the contract OPEN.
    The party carrying the contract must prove default as a prerequisite to further action. They may repossess as follows:
    • A 15 day notice must be issued. The original buyer may pay in full and be reinstated. This may occur multiple times w/o penalty.
    • The original buyer shall receive sale information within 20 days of sale.
      * 20 day consignment sale rules apply.
    • Loan amount, repossession costs & Division 12 items are the only charges against this type of sale.
    • A bill or a check must be issued to close the sale.
    • Whenever a contract fails to execute due to an inability to obtain financing the dealer must:
    Refund all moneys paid by purchaser
    Return trade-in vehicle to purchaser
    *Never sell a trade-in vehicle until the contract is fully executed.
    Spanish Speaking Buyers
    All sales contract negotiated in Spanish require the dealer to provide a Spanish language contract.
    All disclosure signs posted should be in Spanish.
    Any required disclosures should have blank Spanish copy attached.
    A statement signed by the Spanish speaker is recommended.
    The maximum fee a dealer may charge for document prep is $ 45.

    MOTOR VEHICLE FINANCING

    Once again, the dealer must disclose the terms of financing on the sales contract as per sections 2981 of the civil code & regulation Z.
    The Truth In Lending Act enables buyers to compare the costs of borrowing from different lenders. The Truth In Lending Act, under regulation Z requires lenders to disclose the terms and costs of all loan plans, including:
    • the annual percentage rate, points and fees,
    • the total of the principal amount being financed,
    • payment due date and terms,
    • including any balloon payment where fees would be charged,
    • including the highest rate the lender would charge,
    • how it is calculated and the monthly payment,
    • total finance charges, whether the loan is assumable, application fees, annual or one time fees and pre-payment penalties.
    The simple interest method & the precomputed basis method are the two methods permissible by the civil code.
    "Simple-interest basis" means the determination of a finance charge, other than an administrative finance charge, by applying a constant rate to the unpaid balance as it changes from time to time either:
    (1) Calculated on the basis of a 365-day year and actual days elapsed (although the seller may, but need not, adjust its calculations to account for leap years); reference in this chapter to the "365-day basis" shall mean this method of determining the finance charge, or

    (2) For contracts entered into prior to January 1, 1988, calculated on the basis of a 360-day year consisting of 12 months of 30 days each and on the assumption that all payments will be received by the seller on their respective due dates; reference in this chapter to the "360-day basis" shall mean this method of determining the finance charge.

    "Precomputed basis" means the determination of a finance charge by multiplying the original unpaid balance of the contract by a rate and multiplying that product by the number of payment periods elapsing between the date of the contract and the date of the last scheduled payment.
    • Usury laws have been eliminated and rates do vary.

    • Regardless of the method, the rate must be converted into an annual percentage rate applicable to the unpaid balance.

    • The unpaid balance, using the annual percentage rate must then be computed into a base monthly payment over the term of the contract.
    *This allows a comparison between dealers for a similar vehicle.
    See Civil Code Lending Requirements

    SALES AND USE TAX

    All dealers are required to obtain and post a permit from the State Board of Equalization to collect and remit sales & use taxes.
    All dealers shall, in every transaction of a used vehicle, pay to the state the applicable sales and use taxes.
    We recommend a separate check to the board for each retail transaction. The memo box of the check should include:
    • ROS number
    • Year make and model of the vehicle
    • Taxable sales price ( with docs fee and smog inspection included)
    • Buyers county of residence
    • Tax rate for that county.
    • These checks should be set aside for monthly or quarterly reports.
    The basic sales and use tax is 7.25 %
    There are some counties with increased rates.
    Check with state board local office for applicable rate at your location.
    Dealers are not required to collect additional tax if the buyer lives outside the higher tax district as per B of E regulation 1823.5(d).
    The taxable selling price of the vehicle is the total of the following:
    • The vehicle cost
    • The accessories added and the labor to install them.
    • The document preparation fee ( $ 45. Max.)
    • The smog inspection fee ( $ 50. Max.)
    This total is then used and multiplied by the applicable tax rate for the buyers county of residence. For example:
    1000. + 45. + 50. = 1095. x .0875 = $ 96.00 tax due. Or:
    Price + docs + smog = total x Alameda County = Tax Due
    The following items are non-taxable:
    • Finance charges
    • License & registration fees
    • Insurance charges
    • Smog certificate fee ( $ 8.25 Max.)
    All dealers shall, when applicable, pay a separate use tax for vehicles in inventory obtained with advance registration. All dealers shall, when applicable, pay a separate use tax for vehicles in inventory used for personal use. Use tax rate is equal to the sales tax rate at the licensed location.

    DEPARTMENT OF MOTOR VEHICLE FORMS

    The report of sale (ROS) book is required of each dealer, provided by and remains DMV property. There are separate wholesale and retail report of sale forms.
    The wholesale report of sale form is a three-part form and one part must be sent to DMV within 5 days upon vehicle transfer to another dealer. One copy remains with the selling dealer and one with the buying dealer.
    The retail used vehicle report of sale is required for each sale. The four parts are:

    Application copy (mail w/title & reg262 within 30 days, local)
    Dealer's notice (mail to DMV within 5 days, Sacramento)
    Purchaser's operating copy (in vehicle window)
    Book copy (in office for four ( 4 ) years)
    Mark voided forms and place all parts in your dealer book.
    The dealer must keep track of each numbered form.
    The DMV recommends using the forms in numerical order.
    The retail used car dealer uses two forms to transact business.
    The retail report of sale form is a full page and used for all retail transactions.
    The wholesale report of sale form is one half (1/2) page and used for all wholesale transactions.
    Remember, a retail dealer is automatically a wholesaler (included in the license). But, a wholesaler is not necessarily a retail dealer.
    Retail Timeline and the Penalties which apply
    A retail sale begins on the date listed on the Report of Sale:
    Retail Time
    Line within:

    5 days

    20 days

    30 days

    50 days
    ASF Penalties: $5.
    (no notice sent)
    $5.
    (incorrect notice
    posted on vehicle)
    $5.
    (no documents sent)
    $25.
    (no corrections returned)
    - within 5 days a notice must be sent to DMV (DMV, PO Box 944292-2920, Sac,CA, 94244-2920)
    - within 20 days ( per regulation, extended to 3o days by memo ) fees must be posted
    - within 30 days documents must be posted
    - within 50 days corrections must be returned

    If this is not done in a timely manner the following ASF ( administrative service fee ) apply:
    - $5. ASF for not sending the retail notice within 5 calendar days, not counting the date of sale
    - $5. ASF for posting the incorrect notice in the vehicle
    - $5. ASF for not sending documents within 30 calendar days, not counting the date of sale
    - $25. ASF for not sending corrections and completing an application within 50 days, not counting
       the date of sale
    The section which applies and outlines this on the DMV website is:
    http://www.dmv.ca.gov/pubs/vctop/d03/vc4456.htm
    Also see: Section 4456 - Use and Display of Report-of-Sale Forms which identifies the 30 day requirement to post fees on a used vehicle sale.
    If you need forms: The books are the property of the DMV, must be available for inspection and the dealer must take steps to reasonably store and protect the documents.
    Report of Sales
    Each retail ROS form must be completed in its entirety. The sections are :
    1. Date of sale as is the date the buyer paid for the vehicle or the date the buyer signed a contract and took possession of the vehicle.
    2. The vehicle make and not the model.
    3. The manufacturer's year model as on title.
    4. The body type abbreviation as per DMV.
    5. The mode of power, generally gas or diesel.
    6. The number of axles.
    7. The unladen weight.
    8. The vehicle identification number. *Check vin as on title.
    9. The last year of registration.
    10. The last state or country of registration.
    11. The last registered license plate number.
    12. The buyer's residence county, to determine fee.
    13. The buyer's name and California DL or ID.
    14. The buyer's mailing address.
    15. The dealer's name, address & authorized signer's signature.
    16. The dealer and salesperson license numbers.
    17. The buyer's signatures.
    18. The vehicle odometer mileage
    The five day dealer notice of sale copy, bottom of original, shall be mailed to the DMV within five calendar days, not counting the date of sale.
    The temporary operating copy shall be affixed to the vehicle interior so that it may be read from outside of the vehicle.
    If the vehicle has expired registration or will expire within 60 days place the copy in the lower rear window on the drivers side.
    The vehicle may have printed flashers while temporary is in the window.
    If the vehicle is missing a front plate, remove rear plate, destroy it, charge the customer an additional $ 16. and make application for new plates.
    The fees shall be delivered to the DMV within 20 days of the date of sale.
    The dealer must pay fees, including penalties if expiration occurs prior to acquisition into dealer inventory. The buyer only pays fees from the date of sale forward, and the fee must be prorated, if applicable.
    The buyer must pay one full year of fees when making application of an out of state vehicle. Dealer may not charge for required vehicle verification.
    The application copy shall be delivered to the DMV, along with all transfer documents, within 30 days of the date of sale.
    As of 01-01-99 fees may be paid within 30 days after the date of sale.

    VEHICLE LICENSING & REGISTRATION

    There are two types of California title. They are complying title, date & miles printed on the front, and non-complying title, no date & miles printed.
    To transfer a used vehicle you need to submit a signed title or duplicate application and a completed DMV REG262 after 05-01-98.
    You may encounter old style paperwork and you may still have to process this to complete a transfer.
    The DMV REG 262 contains, on one form, all of the documentation needed for most vehicle transfers. The sections are:
    Vehicle identification section
    *Transfers w/o vin will be returned.
    Bill of sale section The dealer identifies the buyer & seller,
    purchase price & if transfer is gift.
    Odometer disclosure statement Must be complete and signed by both the
    buyer/ seller and the dealer.
    Power of attorney This allows the dealer to register the
    vehicle into the buyer's name. The power of
    attorney is not valid without a signature.
    Buyer and seller information Must be completed.
    All relevant documents pertaining to the terms and conditions of any sale shall be signed by the buyer. Printed names and signatures must be in ink.
    Errors or alterations on this form will void and a new one will have to be completed. No strikeouts, No whiteout and No highlighting.
    A dealer cannot represent both a buyer and a seller in the same transaction regarding assignment of power of attorney. Two bill of sale forms required.
    No person shall drive, move or leave standing upon a highway.......any motor vehicle unless it is registered and the appropriate fees have been paid in full.
    If a vehicle has expired California registration or it will expire within 60 days or it is an out of state vehicle, registration fees shall be collected by the dealer at the time of sale.
    All registration fees collected by the dealer are to be submitted to the DMV within 20 days of the date of sale.
    * As of 01-01-99 fees may be paid within 30 days after the date of sale.
    All dealers must pay a transfer fee following the sale of a used motor vehicle to the DMV. The fee is $ 15. as of 07-01-99.
    The time requirements for transfers are as follows:
    If the registration is expired or out of state the fees must be paid within 20 days from the date of sale.

    All other applications and transfer fees must be submitted and paid within 30 days of the date of sale.

    If the application is first submitted within 30 days of the date of sale and the application is returned the dealer has 30 days to correct and return the item but may not exceed 50 days from the date of sale to complete the transfer with the DMV to avoid a penalty.
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    Administrative Service Fees
    Administrative service fees are penalties issued against a dealer by DMV.
    Each ASF count against a dealer can be used as a separate count against the dealer's license in any administrative action taken against the dealer.
    ASF penalties cannot be passed on to the buyer.
    When the following omissions occur a penalty is required:
    - Dealer fails to send in "dealer notice" of report of sale. ASF penalty of $ 5.
    - Dealer fails to display a report of sale copy on vehicle. ASF penalty of $ 5.
    - Dealer fails to submit application with all fees,
      penalties and supporting documents to DMV
      within 30 days of the date of sale.
    ASF penalty of $ 5.
    - Dealer fails to clear an application within 50 days ASF penalty of $ 25.
    Application for waiver of fees requires a statement of facts from the manager of the DMV field office accepting application.
    Unpaid ASF's can result in bond activation and loss of license.
    An out of state delivery occurs when a buyer resides in another state and he wishes to register the vehicle in that state.
    The used report of sale should state :" for registration out of state ". The buyer must obtain registration from his home state before the vehicle is moved on the highways, or the buyer must obtain a one way permit from the DMV for a fee of $ 15.

    Notarized documentation of direct delivery needed for tax rules, unless a bill of lading from a licensed transporter is on file.

    Board of equalization forms recommended

    Access them @ www.boe.ca.gov
    For vehicle sales out of country, if time is critical:
    A quick title request for certificate of title to be issued within 72 hours may be honored for an additional fee of $ 15. All original fees still apply and a completed original or transfer application must accompany the request.
    All quick title requests must be submitted to a specific office for processing.
    The quick title office:
       Department of Motor Vehicles
       72 Hour Special Processing D - 238
       2415 First Avenue
       Sacramento, California, 95818
    A dealer shall, without notice or request from the buyer and/or DMV return all fees overpaid by a buyer for licensing, taxes and transfer of vehicle.
    A dealer may not collect a non- refundable deposit and must refund all deposits when a buyer chooses not to complete a sales transaction.
    Delivery of the vehicle at the licensed location is required for completion.
    This would include so called "auto buying service" fees.
    This would include deposits for custom or specialty vehicles.

    VEHICLE EQUIPMENT, DIVISION 12 COMPLIANCE

    Dealer liability exists on all safety equipment. A vehicle sold by a licensed dealer must comply with all division 12 requirements.
    The vehicle must be safe.
    The vehicle must comply with federal safety standards.
    The lighting equipment must be operational.
    The brakes must be above 30% useful life.
    The rear view mirrors must be operational.
    The horn must be operational.
    The smog devices must be operational.
    The safety belts must be operational.
    The seatbelt warning system must be operational in 1st sold after 01-01-93.
    The bumpers must be in place.
    The muffler must be operational.
    The tires must be above minimum wear standards.
    The windshield must be in place with no cracks.
    The wipers must be operational.
    Absolutely NO waiver of division 12 requirements
    See Division 12 violations
    No as-is sales are allowed. If a vehicle does not meet division 12 requirements, it may only be sold to another dealer with a disclosure, a statement of facts stating:
    This vehicle DOES NOT meet division 12 requirements.

    This vehicle is being sold for parts.         *not to be driven again or
    This vehicle is being sold for salvage.      *may be reconditioned
    As of Jan 1, 2001. all auctions must be licensed dealers.
    Disclosure requirements for as - is vehicles required in writing.
    A proper disclosure is made with a STATEMENT OF FACTS
    See: Statement of Facts

    ODOMETERS

    The odometer must be functional & in working condition at the time of sale. It is an illegal act to operate a motor vehicle with the intent to defraud. Altered odometers are also illegal. It is a crime to disconnect, reset, rollback or alter an odometer with the intent to alter the mileage displayed. Repaired odometers require disclosure unless mileage remains the same.
    A proper disclosure is made with a STATEMENT OF FACTS.
    If the odometer is repaired and cannot accurately reflect the mileage, the odometer shall be adjusted to read "00000" and a plate shall be attached to the left doorframe indicating the mileage before and date of service.
    * This plate shall be made of engraved metal or hard plastic.
    Odometer disclosure shall be completed by the legal owner of record, the repossessor, on all vehicles that have been repossessed, using a separate odometer disclosure statement of facts form.
    The word "repo" is entered in lieu of a signature on the face of complying title. A certificate of repossession is used to complete a transfer without the registered owner's signature.
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    SMOG / AIR POLLUTION CONTROL

    All used motor vehicles, must pass a smog test and certificate on file prior to offering a vehicle for retail sale.
    For purposes of the smog test vehicles must be in excess of 7500 miles.
    For purposes of California registration, out -of state vehicles with less than 7500 miles cannot be registered, unless a "California Certified" federal emission sticker is posted on the vehicle. See: CA Air Recourses Board Guidelines for Non California Vehicles.
    Dealer to dealer sales have an exemption from smog test requirements.
    A vehicle is assumed to pass unless disclosed in writing.

    Therefore, Statement of Facts & salvage disclosure required if no smog or non division 12.

    As of January 2001, ALL auctions must be licensed dealers and written disclosure required on as-is sales to dealers @ auction sale.
    The maximum charge for smog inspection is $ 50.
    The maximum charge for the certificate is $ 8.25.
    * if smog fee exceeds allowance only charge $ 58.25.
    Only increase fee when the law changes per DMV.
    As of 01-2000, dealer smog good for (2) two years.
    The current calendar year minus 29 equals the year model exempt from smog certification.
    Example: The calendar year is 2004- 29 = 1975 exempt year model
    A Release of Liability, filed in the name of the dealership, as buyer, may assist in removing enhanced status for dealers in non - enhanced areas. It will also register as an application in process moving the vehicle into dealer inventory in the DMV computer database.

    BUREAU OF AUTOMOTIVE REPAIR REGULATIONS

    Any dealer who desires to offer and conduct automotive repair is required to register with the Department of Consumer Affairs. This registration is required by the Bureau of automotive repair Act and includes all who, for compensation, engage in the business of repairing or diagnosing vehicle malfunctions.

    VEHICLE HISTORY DISCLOSURES

    The dealer must accurately reflect the known condition of the vehicle at the time of sale and/or advertisement. The dealer must disclose material damage to a buyer. This is any damage a buyer might want to know in making their decision to purchase the vehicle. Failure to disclose may result in a sale being unwound ( give the money back ) and punitive damages.
    This information shall be disclosed on a statement of facts form. At this time there is no section which requires this disclosure, yet section 9900 cvc requires it in new car and demo transactions.
    Some dealers perform a carfax type report on each vehicle to avoid unpleasant surprises.
    Once again, repaired odometers require disclosure unless the mileage remains the same and the odometer remains functional.
    Disclosure of prior history usage is required when a vehicle has been:
    Rental, Taxi, Insurance salvage, Revived salvage, City, county, state or federal vehicle or any former law enforcement vehicle.
    Disclosures must be signed by the buyer prior to completion of the contract.
    Minor items may be listed on the Federal Buyer's Guide.
    Required disclosures should be done on a Statement of Facts form.
    A Spanish language copy should be provided, when appropriate.
    The lemon law requires manufactures to repurchase or replace vehicles from new car buyers when they prove to be defective. IF a new vehicle is in the shop more than 30 days or repaired 4 or more times, it is a defective vehicle. See Lemon Law Definition
    And a "lemon" as per civil code. As such, any dealer who offers a lemon vehicle for sale, prior to lease, sale or transfer must provide the buyer a statement which reads: This motor vehicle has been returned to the manufacturer due to a defect in the vehicle pursuant to consumer warranty laws. The title to this vehicle is permanently branded with the notation "lemon law buyback".
    The dealer shall affix a plate identifying the vehicle as a "lemon law buyback" to the left front door frame and it cannot be removed.
    * This plate shall be made of engraved metal or hard plastic.
    It is the dealers responsibility to brand title and doorframe of out of state vehicles for resale.

    WARRANTIES

    There are several types of warranties which may arise during the dealer offer for sale of a motor vehicle.
    Two implied warranties exist, as specified by the uniform commercial code unless affirmatively disclaimed by the dealer. These are:
    Implied warranty of merchantability. This warrants the vehicle is fit for the ordinary purposes for which it was intended. It goes without saying that the vehicle complies with Division 12.
    If an after sale repair is made on for a NON -Division 12 item we suggest:
    A small nominal fee ( $5. ) for the repair and a warranty release signed with copy to the buyer to prevent further repairs and avoid an implied extension of the warranty from the 'goodwill' repair.
    Implied warranty of fitness for a particular purpose. This warrants the vehicle is fit for a particular purpose, for instance, towing a boat.
    Express warranties arise from oral or written agreements between the dealer and the buyer.
    * Be careful what you & your staff say to your customers. Most dealers do not get themselves in trouble, their salespeople usually do that for them.
    The dealer may include a warranty in the price of the vehicle by means of the Buyer's Guide. This type of inclusive warranty is taxable.
    You must specify full or limited warranty, % of parts and labor you will pay, which systems are covered and for how long.
    Service agreements are required to fully and conspicuously disclose in simple and readily understood language the terms, conditions and exclusions of the contract. This type of warranty is not taxable.
    The disclosure requirements are:
    • name of the buyer
    • description of the vehicle
    • date of commencement & duration
    • parts covered
    • steps to obtain warranty service
    • right to cancel provision, if any.
    • dispute resolution procedures available.
    • dealer statement of who has the legal & financial obligation to perform the warranty service & of what he will and will not do in the event of a problem.
    See Related Links:
    - Division 12 - Equipment of Vehicles
    - Completed Buyers Guide
    - Better Business Bureau Used CAR Warranties

    FEDERAL BUYER'S GUIDE

    The requirements for the used car buyers guide as specified in section 455 of the US code of regulations. They are:
    This form is signed by the buyer only before sale.
    A buyers guide must be posted by the dealer on the side window of every vehicle displayed for sale with both sides visible.
    The label may be removed temporarily for a test drive but must be re-affixed after the test drive is complete.
    The dealer shall have the buyer's signatures.
    The original or a copy of the buyer's guide, including all terms and required disclosures, shall be presented to the buyer prior to presentation of the sales contract of a used vehicle sale. This document should be used to identify ALL known defects in writing.
    If you disclose it, you do not have to fix it, excluding Division 12 items.

    USE OF SPECIAL PLATES

    The use of dealer plates is appropriate when :
    used by the licensed dealer for any purpose
    used by an individual in the dealer household for pickup & dropoff
    used to operate any vehicle in the dealer's inventory for demonstration
         with letter of authorization, unaccompanied up to seven days or
         with a licensed salesperson and no letter
    used for a special event by any individual w/ letter of authorization
    used by any employee of the dealer for dealer related functions.
    used by an employee transferring between dealer sales locations.
    used by a licensed salesperson for demonstration purposes only.

         *no additional use unless vehicle is leased or rented to him / her.
         used by a family member as long as the licensee is present in vehicle.
    The personal use of a dealer plate creates tax liability. The rates of tax are based upon the purchase price and they are:

         1 / 40th per month for dealer personal use.
         1 / 60th per month for salesperson personal use.
    All vehicles should be placed in inventory using a release of liability form placing the dealer as buyer on the date of acquisition.
    All vehicles in inventory operated on the public streets, regardless of registration tag expiration date, shall have a dealer plate affixed.
    All dealer principals may pull a trailer using a dealer plate.

    *See Tax Guide below for additional information.
    The use of dealer plates is not appropriate when :
         used by an employee doing personal business.
         used for work and service vehicles.
         used by a family member without the licensee present in the vehicle
         unless for pickup and dropoff as described above.
         see DMV Memo on Dealer Plate Use

    The dealer plate shall be displayed on the rear of the vehicle and over the original plates, if a vehicle has been previously registered.
    The registration card for the dealer plate shall be with the vehicle bearing the dealer plate. We suggest you tape a reduced size copy of your dealer license & registration card to each dealer plate. See Form to Replace a Lost/ Stolen or Missing Dealer Plate
    If a dealer plate becomes lost or stolen, it is the dealer's responsibility to immediately notify the local police and report a lost or stolen plate.
    Notify Occupational Licensing of theft and need for replacement. Use DMV form OL 247.
    Replacement Plate: $ 15.
    Replacement Reg Card $ 7.
    See Related Links:
    - DMV Memo on Dealer Plate Use
    -