DMV Dealer Pre-License Training
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Questions and Answers

Which of the following actions could result in a Dealer license suspension? (Select all that apply)

  • Misuse of Special (Dealer) Plates (correct)
  • Payment of 'Bird Dog' fees (correct)
  • Failure to pay Administrative Service Fees when due (correct)
  • Selling at licensed locations
  • Where must the Guide be placed for it to be considered in plain view? (Select all that apply)

  • Hung from the rear-view mirror (correct)
  • Under the seat
  • Under the windshield wiper (correct)
  • In the glove compartment
  • What can the DMV, as well as State and Federal regulatory agencies do?

    Limit, suspend, or revoke a Dealer's license and impose penalties.

    What is the required Surety Bond value for a New or Used Auto-Commercial Dealer?

    <p>$50,000</p> Signup and view all the answers

    When should a vehicle be advertised as 'Certified'?

    <p>The odometer indicates the actual mileage</p> Signup and view all the answers

    What must be done if the odometer cannot register the same mileage as before the repair?

    <p>It must be adjusted to read '0' with a notice attached.</p> Signup and view all the answers

    For how long must Dealers securely store their Reports of Sale?

    <p>90 days before moving them to offsite storage for a total of 36 months.</p> Signup and view all the answers

    What is the maximum compensation a Dealer can receive from an institution for financing a vehicle?

    <p>2.5% for terms up to 60 months</p> Signup and view all the answers

    What information must a Dealer provide when selling a Lemon Law buyback vehicle?

    <p>They must notify the buyer of the vehicle title mark, year, make, model, and nonconformities.</p> Signup and view all the answers

    What must Dealers submit to renew their license? (Select all that apply)

    <p>Renewal Application (DMV form OL 45)</p> Signup and view all the answers

    Who may operate a vehicle with special plates for any purpose?

    <p>A sole owner, a general partner, or a corporate officer who is actively engaged in management.</p> Signup and view all the answers

    What must a Conditional Sales Contract include?

    <p>Specific terms regarding the sale and any financing conditions.</p> Signup and view all the answers

    Study Notes

    Dealer License Suspension

    • Actions that may lead to suspension include misuse of special (dealer) plates, bait & switch advertising, failure to pay administrative fees, and submitting dishonored checks.
    • Selling vehicles at unlicensed locations, failing to transfer titles, and paying "bird dog" fees are also grounds for suspension.

    Guide Display Requirements

    • The Dealer Guide must be clearly displayed with both sides visible.
    • Acceptable placements include hanging from mirrors, under windshield wipers, or attached to side windows.
    • Keeping the Guide in glove compartments or trunks is insufficient as it is not in plain view.

    Regulatory Authority

    • The DMV and other regulatory agencies can limit, suspend, or revoke a Dealer's license for non-compliance with laws and regulations.

    Surety Bond Requirements

    • Dealers must maintain a Surety Bond:
      • $50,000 for New or Used Auto-Commercial Dealers.
      • $10,000 for Motorcycle Dealers and Wholesale-Only Dealers (less than 25 vehicles per year).

    Advertising Standards

    • Vehicles cannot be advertised as "Certified" if they lack accurate mileage, have been reacquired under "lemon law," or suffered damage unless properly repaired.
    • Titles branded as buybacks, salvage, or non-repairable also disallow "Certified" advertising, along with vehicles sold "as is."

    Odometer Disclosure

    • If an odometer is replaced and cannot register prior mileage, it must be reset to "0" with a notice affixed to the vehicle specifying previous mileage and service date.

    Record Storage Requirements

    • Dealers must securely store Reports of Sale for 90 days, implementing federal safeguard standards.
    • After 90 days, records should be stored offsite or with a third-party vendor for a total of 36 months.
    • Digital storage is permitted after the initial 90 days, and records must be available to the DMV within three business days.

    Compensation Limits Under AB 68

    • Under California's "Car Buyer Bill of Rights," dealer compensation from financing institutions is capped at:
      • 2.5% for terms up to 60 months.
      • 2.0% for terms longer than 60 months.
    • Exceptions exist when the dealer bears the entire financial risk or when the assignment exceeds six months post Conditional Sale Contract.

    Lemon Law Buyback Notices

    • Dealers selling Lemon Law buyback vehicles must inform buyers in writing about:
      • Vehicle details (year, make, model, VIN).
      • Title status ("Lemon Law Buyback").
      • Nature of nonconformities and any repairs attempted.

    License Renewal Process

    • To renew a Dealer license, submit:
      • Renewal Application (DMV form OL 45).
      • Proof of continuing education (every two years).
      • Proof of Surety Bond.
      • Payment of renewal fees.

    Special Plate Operation Rules

    • Vehicles with special plates may be operated by individuals such as:
      • Sole owners, general partners, LLC managers, or corporate officers actively engaged in operations.
      • General or business managers and sales managers under the same conditions.
      • Drivers if they are accompanied by an operational manager.
      • Unaccompanied adults residing with operational managers for pickups or drop-offs.

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    Description

    Test your knowledge on the key concepts related to DMV dealer pre-license training. This quiz covers important actions that could lead to dealer license suspensions as well as compliance requirements. Prepare for your licensing with essential definitions and guidelines.

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