2.030 Dismantler (VC §220)

A dismantler is any person:

• Engaged in the business of buying, selling, or dealing in vehicles of a type required to be registered under the VC, including nonrepairable vehicles, for the purpose of dismantling the vehicles.

• Who buys or sells the integral parts and component materials thereof, in whole or in part or deals in used motor vehicle parts.

This does not apply to the occasional and incidental dismantling of vehicles by dealers who have secured dealers license plates from the DMV for the current year and whose principal business is buying and selling new and used vehicles, or by owners who desire to dismantle not more than three personal vehicles within any 12-month period (VC §§220 and 11500, et seq).

2.025 Dealer (VC §285)

In general, a vehicle dealer is a person who, on a full-time or part-time basis:

• For commission, money, or other thing of value, buys or offers for sale, a vehicle subject to registration, or a motorcycle, snowmobile, or all-terrain vehicle subject to identification (ID), or a trailer subject to registration or ID.
• Is engaged wholly or in part, in the business of selling, buying, or taking in trade vehicles for the purpose of resale, selling, offering for sale, consigned to be sold, or otherwise dealing in vehicles, whether or not such vehicles are owned by the
  person.

See VC §286 for exceptions.

A dealer cannot advertise for sale, sell, or purchase for resale any new vehicle of a make for which the dealer does not hold a franchise (VC §11713.1(f)).

Vehicle dealers exclusively involved in the sale of vehicles between licensed dealers are wholesale dealers.

Persons regularly employed by licensed dealers, and persons who sell cars which were purchased and used as personal vehicles are not considered dealers (VC §286).

A vehicle dealer who is authorized to do business as, and has an established place of business in another state, is not subject to licensing requirements in California if:

• A place of business is not established in this state.
• The business transacted in California is limited to the importation of vehicles for sale, to, or the exportation of vehicles purchased from, persons licensed in California (VC §11700.1).

Used vehicle dealers and wholesale only dealers must complete a dealer education program, pass a written exam administered by DMV prior to completion of the dealer application, and complete a continuing education program of at least four hours every two years (VC §11704.5).

2.020 Consignments (VC §266)

A consignment is an arrangement under which a dealer agrees to accept possession of a vehicle of a type required to be registered under the Vehicle Code from an owner of record for the purpose of selling the vehicle and to pay the owner of record or the owner’s designee from the proceeds of the sale.

Consignment does not include wholesale vehicle sales at a licensed auto auction.

“Owner” does not include any person licensed as a dealer, manufacturer, manufacturer branch, distributor, or distributor branch.

Consignment Agreements Required (VC §11729)
Dealers must execute a consignment agreement containing all of the terms, phrases, conditions, and disclosures as shown in VC §11730 and signed by both the consignor and the consignee.

Failure to comply with the terms of the agreement or to pay the agreed amount to the consignor (or designee) within 20 days after the date of sale is cause for suspension or revocation of the dealer’s license (VC §11705 (a)(10)).

Report of Sale Required
The selling dealer must complete a Report of Sale–Used Vehicle (REG 51) and the transfer documents as usual when the vehicle is sold.

2.015 Business Partner Automation Program

The Business Partner Automation (BPA) program allows DMV to establish contracts with qualified industry partners who have a business need to process vehicle registration and titling transactions from their remote locations.

Dealers enrolled in the BPA program must process new and used retail and lease transactions using electronic programs that are provided by first-line service providers. Transactions involving motorcycles, recreational vehicles, and off-highway vehicles, subject to identification are exempt from the electronic processing requirement.

Business partners are authorized to process and issue validated registration cards, full year registration stickers, automobile and commercial license plates, and may charge an additional fee for their services.

The BPA program allows business partners to process certain types of transactions. BPA partners are currently authorized to process:

• New vehicle reports of sale for auto and commercial vehicles.
• Full year registration renewals for automobiles, commercial vehicles, and motorcycles.
• Registered owner transfers.
• Salvage certificate applications.
• Junk applications.
• Nonrepairable certificate applications.
• Vehicle license fee (VLF) refunds (restricted to salvage pools only).
• Legal owner transfers.
• Nonresident vehicles.
• Miscellaneous originals.
• Replacement titles.
• Vessels.
• Transactions when administrative service fees (ASF) are due.
• Personalized and special license plate assignments and/or interchanges.
• Transactions with a special or personalized license plate.
• Issue sequential Arts Council License Plates.
• Issue exempt license plates.
• Unwinds/rollbacks.
• Disabled Veteran/Disabled Person License Plate assignments/interchanges.
• Issue single plate truck tractor inventory.
• Expedite posting fees transactions on “nonoriginal” applications.
• Additions to and deletions from a PFR feet.
• Substitute vehicle license plate(s) and sticker(s).

Electronic Filing and Documentation Preparation Fees (VC §4456.6(a),(1),(A)&(B))

The following rules apply when collecting fees from buyers:

• Dealers participating in the BPA program may charge customers an $85 documentation fee per transaction.
• Nonparticipating dealers may charge a $70 documentation fee per transaction.
• A dealer may charge the purchaser or lessor an electronic filing fee, which does not exceed the actual amount the dealer is charged by a first-line service provider. California regulations prohibit consumers from being charged more than $33.
• A dealer may not charge an electronic filing fee to the purchaser or lessor if the dealer uses a registration service to complete electronic filing process.
• A dealer may not collect, or must immediately refund, an electronic filing fee to the purchaser or lessor if the dealer is unable to complete the transaction electronically for any reason.

The BPA program is comprised of the following types of business partners:

First-line Business Partner—A partner who receives information from DMV and uses it to complete registration and titling activities for that partner’s own business purposes.

First-line Service Provider—A partner who receives information from DMV and transmits it to another authorized business partner.

Second-line Business Partner—A partner that receives information from a first-line service provider. Second-line business partners are responsible for collecting the registration fees due to DMV and remitting them to their respective first-line service providers.

The following types of companies can become second-line business partners:

• Registration services
• New/used vehicle dealers
• Vehicle rental companies
• Vehicle leasing companies
• Dismantlers
• Salvage pools

Refer inquiries regarding participation in this program to the BPA Administrator, at (916) 657-6258.

2.010 Autobroker (VC §166)

An autobroker or auto buying service is a dealer as defined in VC §285, who engages in the business of brokering as defined below:

• Brokering is an arrangement under which a dealer, for a fee or other consideration, regardless of the form or time of payment, provides or offers to provide the service of arranging, negotiating, assisting, or effectuating the purchase of a new or used motor vehicle, not owned by the dealer, for another (VC §232.5).

• A dealer may not engage in brokering a retail sales transaction without having an autobroker’s endorsement to their dealer’s license.
  • This endorsement subjects the dealer to all of the licensing, advertising, and other statutory and regulatory requirements and prohibitions applicable to a dealer.
• An autobroker will be required by DMV to maintain a log for each retail sale brokered by that dealer and deposit the purchase and deposit money into a trust account.

2.005 Administrative Service Fees (ASF) (VC §4456)

All California dealer or lessor-retailer retail vehicle sales are subject to the administrative service fee (ASF) law.

Note ASF cannot be passed on to the buyer by the dealer or lessor-retailer.

ASF are assessed for:

• Failure to submit:
  • The dealer notice portion of the report of sale document to DMV headquarters within five calendar days after, but not including the date of sale (VC §5901).
  • The application and fees due to DMV within 20 days of the date of sale for a new vehicle or within 30 days for a used vehicle.
• Failure to clear an application for registration of a:
  • New vehicle within 40 days of the date of sale or within 20 days of the date DMV first returned the application, whichever is later.
  • Used vehicle within 50 days of the date of sale or within 30 days of the date DMV first returned the application, whichever is later. Used vehicle includes nonresident vehicles.

Note If DMV holds an application for processing more for than five working days, one day is added to the 40 or 50 days for each day it is held over the five days.

California Certificate of Title Unavailable

To avoid ASF on an application that cannot be cleared because DMV is processing a prior transaction or the California Certificate of Title is otherwise unavailable, submit the incomplete application and fees due within 20 days (new vehicles) or 30 days (used vehicles) of the sale date.

ASF Exceptions

A dealer or lessor-retailer is not subject to any ASF, other than the 5-day notice requirements for:

• Vehicles sold to public agencies (the application may be given to the buyer).

• New vehicles to be altered before registration (the application may be given to the buyer).

• Vehicles sold for use exclusively on private property.

• Vehicles sold for registration out of state.

• Customer demands California Certificate of Title.

ASF Billings and Payments (VC §4456.1)

Vehicle dealers and lessor-retailers are billed on a monthly basis for outstanding ASF.

• Do not remit any ASF until an invoice is received from DMV headquarters.

• To ensure proper credit, always submit the invoice with your ASF payments to the ASF/ISF Unit in DMV headquarters at the address shown on the billing.

2.000 Introduction

This chapter provides general information for most vehicle industry and occupational licensees.

Additional information and related forms may be found in the California Code of Regulations or by accessing the OCCUPATIONAL LICENSING section of the VEHICLE INDUSTRY SERVICES tab on the DMV website.

Chapter 2: General Information – Licensees

2.000 Introduction

2.005 Administrative Service Fees (ASF)

2.010 Autobroker

2.015 Business Partner Automation Program

2.020 Consignments

2.025 Dealer

2.030 Dismantler

2.035 Distributor

2.040 Lemon Law Buybacks and Warranty Returns

2.045 Lessor–Retailer

2.050 License Required

2.055 Manufacturer

2.060 Registration Services

2.065 Remanufacturer

2.070 Renter

2.075 Report of Sale Books Issued to Licensees

2.080 Sales by Dealer/Dismantler

2.085 Salesperson

2.090 Special Dealer, Manufacturer, Remanufacturer and Distributor License Plates

2.095 Transporter

2.100 Van Converter

2.105 Vehicles not Requiring an Occupational License

2.110 Vehicle Verifier

2.115 Vessel Agent

2.120 Wholesale Dealer

1.175 17-Digit VINs on Vehicles (FMVSS Regulations, Part 565)

A 17-digit VIN that passes check digit is required on all 1983 and newer year model motor vehicles and all 1985 and newer year model trailers.

Exceptions: Certain motor vehicles incidentally operated on a highway, such a special equipment (SE), off-highway vehicles (OHV), and park trailers, are not required to have a 17-digit VIN.

This does not include “yard trucks”. Yard trucks must have a complying 17-digit VIN to be registered, titled, or operated on-highway, off-highway, or as SE.

Refusal of Registration Required—Federal statutes require DMV to refuse registration of a new vehicle which does not pass check-digit. Most vehicles manufactured for on-road use in the U.S. have a 17-digit VIN. Manufacturers compute the VIN using a mathematical formula obtained from the Society of Automotive Engineers.

Manufacturers of vehicles incidentally operated on the highway may request 17-position VIN assignments from the Society of Automotive Engineers at:

Society of Automotive Engineers
400 Commonwealth Dr.
Warrendale, PA 15096-0001
www.sae.org
1-877-606-7323
(724) 776-4841 ext. 427

1.170 VIN Check-Digit Requirements

Refusal of Registration

Federal statutes require DMV to refuse registration of a new vehicle (including a trailer) which does not pass check-digit.

• Vehicles not manufactured for on-highway use which do not pass check-digit, and do not meet Federal Motor Vehicle Safety Standards (FMVSS) are prohibited from on-highway registration in California.
• If the VIN does not pass check digit and the vehicle is:
  • An off-highway vehicle (OHV) or a vehicle incidentally operated on the highway, the check-digit requirement may be bypassed and the application processed.
  • Not an OHV or a vehicle incidentally operated on the highway, the application will be returned. The submitter must verify the VIN on the application with the VIN assigned to the vehicle and:

Note DMV will waive the administrative service fee (ASF) or registration penalty accrued when the application is cleared, if the original application was received within 20 days of the date of sale.

NHTSA’s address is:

National Highway Traffic Safety Administration
Office of Vehicle Safety and Standards
NEF-1, Rm 5321
400 7th St. SW
Washington, DC 20590