text:
(a) (1) If an insurance company makes a total loss settlement on a nonrepairable vehicle and takes possession of that vehicle, either itself or through an agent, the insurance company, an occupational licensee of the department authorized by the insurance company, or a salvage pool authorized by the insurance company, shall, within 10 days after receipt of title by the insurer, free and clear of all liens, forward the properly endorsed certificate of ownership or other evidence of ownership acceptable to the department, the license plates, and a fee in the amount of fifteen dollars ($15) to the department. An occupational licensee of the department may submit a certificate of license plate destruction in lieu of the actual license plate. The department, upon receipt of the certificate of ownership or other evidence of title, the license plates, and the fee, shall issue a nonrepairable vehicle certificate for the vehicle.

(2) If an insurance company, an occupational licensee of the department authorized by the insurance company, or a salvage pool authorized by the insurance company is unable to obtain the properly endorsed certificate of ownership or other evidence of ownership acceptable to the department within 15 days following oral or written acceptance by the owner of an offer of an amount in settlement of a total loss, that insurance company, licensee, or salvage pool, on a form provided by the department and signed under penalty of perjury, may request the department to issue a nonrepairable vehicle certificate for the vehicle. The request shall attest that the requester has attempted to obtain the certificate of ownership or other acceptable evidence of title, and shall include the license plates and fee described in paragraph (1). The attempt to obtain the certificate of ownership or other acceptable evidence of title shall be submitted concurrently with the payment of the claim or by first-class mail, certificate of mailing, certified mail, other commercially available delivery service showing proof of delivery, or electronic mail.

(3) The department, upon receipt of the certificate of ownership, other evidence of title, or properly executed request described in paragraph (2), the license plates, and the fee, shall issue a nonrepairable vehicle certificate for the vehicle.

(b) If the owner of a nonrepairable vehicle retains possession of the vehicle, the insurance company shall notify the department of the retention on a form prescribed by the department. The insurance company shall also notify the insured or owner of the insured’s or owner’s responsibility to comply with this subdivision. The owner shall, within 10 days from the settlement of the loss, forward the properly endorsed certificate of ownership or other evidence of ownership acceptable to the department, the license plates, and a fee in the amount of fifteen dollars ($15) to the department. The department, upon receipt of the certificate of ownership or other evidence of title, the license plates, and the fee, shall issue a nonrepairable vehicle certificate for the vehicle.

(c) If a nonrepairable vehicle is not the subject of an insurance settlement, the owner shall, within 10 days from the loss, forward the properly endorsed certificate of ownership or other evidence of ownership acceptable to the department, the license plates, and a fee in the amount of fifteen dollars ($15) to the department.

(d) If a nonrepairable vehicle is not the subject of an insurance settlement, a self-insurer, as defined in Section 16052, shall, within 10 days of the loss, forward the properly endorsed certificate of ownership or other evidence of ownership acceptable to the department, the license plates, and a fee in the amount of fifteen dollars ($15) to the department.

(e) Prior to sale or disposal of a nonrepairable vehicle, the owner, owner’s agent, or salvage pool shall obtain a properly endorsed nonrepairable vehicle certificate and deliver it to the purchaser within 10 days after payment in full for the nonrepairable vehicle and shall also comply with Section 5900. The department shall accept the endorsed nonrepairable vehicle certificate in lieu of the certificate of ownership or other evidence of ownership when accompanied by an application and other documents and fees, including, but not limited to, the fees required by Section 9265, as may be required by the department.

(f) This section does not apply to a vehicle that has been driven or taken without the consent of the owner thereof, until the vehicle has been recovered by the owner and only if the vehicle is a nonrepairable vehicle.

(g) A nonrepairable vehicle certificate shall be conspicuously labeled with the words “NONREPAIRABLE VEHICLE” across the front of the certificate.

(h) A violation of subdivision (a), (b), (d), or (e) is a misdemeanor, pursuant to Section 40000.11. Notwithstanding Section 40000.11, a violation of subdivision (c) is an infraction, except that, if committed with intent to defraud, a violation of subdivision (c) is a misdemeanor.

history: (History: Amended by Stats. 2022, Ch. 125, Sec. 2. (AB 2330) Effective January 1, 2023.)


kind: section

code: VEH

text:
(a) If an insurance company requests a salvage pool authorized by the insurance company or an occupational licensee of the department authorized by the insurance company to take possession of a vehicle that is the subject of a total loss claim, and, subsequently, the insurance company does not take ownership of the vehicle, the insurance company may direct the salvage pool or occupational licensee of the department to release the vehicle to the registered and legal owner or lienholder of the vehicle. The insurance company shall provide the salvage pool or occupational licensee of the department with notice authorizing the release of the vehicle to the vehicle’s registered and legal owner or lienholder. This notice may be sent by mail, electronic mail, or a proprietary electronic system accessed by both the insurance company and the salvage pool or occupational licensee of the department.

(b) Upon receiving notice from an insurance company pursuant to subdivision (a), the salvage pool or occupational licensee of the department shall send two notices to the registered and legal owner and any lienholder of the vehicle informing the registered and legal owner and lienholder that the vehicle is available to pick up and will be sold or otherwise disposed of if no response is received. The notice shall inform the owner and any lienholder that the registered and legal owner and lienholder has 30 days from the date of mailing of the first notice and 14 days from the date of mailing of the second notice to pick up the vehicle from the salvage pool or occupational licensee of the department before the vehicle is deemed abandoned. The notice shall also inform the registered and legal owner and any lienholder of their right to contact the salvage pool or occupational licensee of the department regarding their intent to pick up the vehicle in order to receive an additional 30 days from the date of contact to pick up the vehicle before the vehicle is deemed abandoned. Notice under this subdivision shall be sent by certified mail or by another commercially available delivery service providing proof of delivery to the address on record with the department and any other known address, or for vehicles last registered in another jurisdiction, to the address on record with that jurisdiction and any other known address.

(c) If the registered and legal owner or any lienholder contacts the salvage pool or occupational licensee of the department regarding their intent to pick up the vehicle within the time periods described in subdivision (b), the salvage pool or occupational licensee shall give the registered and legal owner or any lienholder an additional 30 days from the date of contact to pick up the vehicle before the vehicle is deemed abandoned.

(d) If the registered and legal owner or any lienholder of the vehicle does not pick up the vehicle within 30 days after the date of mailing of the first notice, and within 14 days after the date of mailing of the second notice, as described in subdivision (b), or within 30 days from the date of contact with the salvage pool or occupational licensee of the department, as described in subdivision (c), the vehicle shall be deemed abandoned, the vehicle’s certificate of title is deemed to be assigned to the salvage pool or occupational licensee of the department.

(e) The salvage pool or occupational licensee of the department, without surrendering the certificate of title, may request, on a form provided by the department and signed under penalty of perjury, that the department issue a salvage certificate or nonrepairable vehicle certificate that is free and clear of all liens for the vehicle. The request shall be accompanied by an attestation and certification that the insurance company did not take ownership of the vehicle and directed the release of the vehicle to the registered and legal owner or lienholder, an attestation and certification of delivery of the notices required pursuant to subdivision (b) or that the notices were returned undeliverable after the notices were sent to the registered and legal owner and any lienholder, as required pursuant to subdivision (b), the license plates for the vehicle, and the fee required by subdivision (c) of Section 11515 for a salvage vehicle or the fee required by subdivision (c) of Section 11515.2 for a nonrepairable vehicle. Notwithstanding any outstanding liens against the vehicle, the department shall issue a salvage certificate or nonrepairable vehicle certificate that is free and clear of all liens for the vehicle to the salvage pool or occupational licensee of the department in possession of the vehicle. An occupational licensee of the department may submit a certificate of license plate destruction in lieu of the actual license plate.

(f) The salvage pool or occupational licensee of the department shall maintain an accurate record of every vehicle it acquires and disposes of pursuant to this section. The records shall be maintained for two years and be open for inspection by any peace officer during the regular business hours of that salvage pool or occupational licensee of the department. The records shall include, but not be limited to, copies of the notices sent to the registered and legal owner and any lienholder of the vehicle and proof of delivery of the notices as specified in subdivision (b).

history: (History: Added by Stats. 2024, Ch. 364, Sec. 1. (AB 1901) Effective January 1, 2025.)

chapter: 3. Automobile Dismantlers

path: 5. OCCUPATIONAL LICENSING AND BUSINESS REGULATIONS > 3. Automobile Dismantlers


text:
(a) Any automobile dismantler owning or controlling any vehicle of a type otherwise required to be registered under this code, may operate or move the vehicle upon the highways without subjecting the vehicle to registration or transfer, or both, solely for the purpose of moving the vehicle from its location to the established place of business of the automobile dismantler or to a scrap processor, if there are displayed on the vehicle special plates issued to the automobile dismantler as provided in this chapter, in addition to other license plates or permits already assigned and attached to the vehicle in the manner prescribed in Article 9 (commencing with Section 5200) of Chapter 1 of Division 3.

(b) The provisions of this section do not apply to work or service vehicles owned by an automobile dismantler.

(c) Every owner, upon receipt of a registration card issued for special plates, shall maintain the registration card or a facsimile copy of it with the vehicle bearing the special plates.

history: (History: Amended by Stats. 1994, Ch. 1220, Sec. 55. Effective September 30, 1994.)

division: 5. OCCUPATIONAL LICENSING AND BUSINESS REGULATIONS


text: The department may issue a certificate of convenience to the executor, executrix, administrator or administratrix of the estate of a deceased holder of validly outstanding special plates and license issued under this chapter, or if no executor, executrix, administrator or administratrix had been appointed, and until a certified copy of an order making such appointment is filed with the department, to the widow or other heir otherwise entitled to conduct the business of the deceased, permitting such person to exercise the privileges granted by such special plates and license for a period of one year from and after the date of death, pending, but not later than, disposal of the business and qualifications of the vendor of the business or such surviving widow or heir for such special plates and license under the provisions of this chapter. The department may restrict or condition the license and special plates and attach to the exercise of the privileges thereunder such terms and conditions as in its judgment the protection of the public requires.

history: (History: Amended by Stats. 1971, Ch. 1214.)


text:
The special plates and license provided for in this chapter shall be automatically canceled if any of the following occurs:

(a) The abandonment of the established place of business of the automobile dismantler or the change thereof without notice to the department pursuant to Section 11513.

(b) The voluntary or involuntary surrender for any cause by the licensee of the special plates and license, except that a surrender of the special plates and license, the cessation of business by the licensee, or the suspension or revocation of the corporate status of the licensee, does not preclude the filing of an accusation for revocation or suspension of the surrendered license as provided in Section 11509, and does not affect the department’s decision to suspend or revoke the license. The department’s decision to suspend or revoke the license may be considered in issuing or refusing to issue any subsequent license authorized by this division to that licensee or any business representative of that licensee.

(c) When the person designated as the licensee has changed, except that the special plates issued to the original licensee may be transferred upon application as provided in Section 11501 and the newly designated licensee, as transferee, shall succeed to the privileges evidenced by the plates until their expiration.

(d) The suspension or revocation of the corporate status of the licensee.

(e) The suspension or revocation of the seller’s permit of the licensee by the State Board of Equalization.

history: (History: Amended by Stats. 1990, Ch. 1563, Sec. 31.)


text:
(a) A vehicle that has been reported as a total loss salvage vehicle or dismantled vehicle may not be subsequently registered until there is submitted to the department all of the following:

(1) The prescribed bill of sale.

(2) An appropriate application.

(3) A vehicle safety systems certificate of compliance issued pursuant to Article 6.5 (commencing with Section 9888.5) of Chapter 20.3 of Division 3 of the Business and Professions Code, except that a fleet owner of motor trucks of three or more axles that are more than 6,000 pounds unladen weight, and a fleet owner of truck tractors, may instead submit certification for their own rebuilt vehicle if the fleet owner operates an inspection and maintenance station licensed by the commissioner under subdivision (b) of Section 2525.

(4) With respect to a motor vehicle subject to Part 5 (commencing with Section 43000) of Division 26 of the Health and Safety Code, a valid certificate of compliance from a licensed motor vehicle pollution control device installation and inspection station indicating that the vehicle is properly equipped with a motor vehicle pollution control device that is in proper operating condition and is in compliance with Part 5 (commencing with Section 43000) of Division 26 of the Health and Safety Code.

(5) Any other documents or fees required under law.

(b) The department may not register a vehicle that has been referred to the Department of the California Highway Patrol under subdivision (b) of Section 5505 or that has been selected for inspection by that department under subdivision (c) of that section, until the applicant for registration submits to the department a certification of inspection issued by the Department of the California Highway Patrol and all of the documents required under subdivision (a).

history: (History: Amended by Stats. 2023, Ch. 681, Sec. 24. (AB 1263) Effective January 1, 2024.)


text:
(a) A licensed automobile dismantler who acquired, for the purpose of dismantling, actual possession, as a transferee, of a vehicle of a type subject to registration under this code shall do all of the following:

(1) Within five calendar days, not including the day of acquisition, mail a notice of acquisition to the department at its headquarters.

(2) Within five calendar days, not including the day of acquisition, mail a copy of the notice of acquisition to the Department of Justice at its headquarters.

(3) Not begin dismantling until 10 calendar days have elapsed after mailing the notice of acquisition. In the alternative, dismantling may begin any time after the dismantler complies with paragraph (4).

(4) Deliver to the department, within 90 calendar days of the date of acquisition, the documents evidencing ownership and the license plates last issued for the vehicle. Proof that a registered or certified letter of demand for the documents was sent within 90 days of the date of acquisition to the person from whom the vehicle was acquired may be substituted for documents that cannot otherwise be obtained. A certificate of license plate destruction, when authorized by the director, may be delivered in lieu of the license plates.

(5) Maintain a business record of all vehicles acquired for dismantling. The record shall contain the name and address of the person from whom the vehicle was acquired; the date the vehicle was acquired; the license plate number last assigned to the vehicle; and a brief description of the vehicle, including its make, type, and the vehicle identification number used for registration purposes. The record required by this paragraph shall be a business record of the dismantler separate and distinct from the records maintained in those books and forms furnished by the department.

(b) Paragraphs (1) and (2) of subdivision (a) do not apply to vehicles acquired pursuant to Section 11515, 11515.2, 22851.2, or 22851.3 of this code or Section 3071, 3072, or 3073 of the Civil Code.

(c) Paragraphs (1), (2), (3), and (4) of subdivision (a) do not apply to a vehicle acquired from another person if the other person has already notified and cleared the vehicle for dismantling with the department pursuant to this code and a bill of sale has been executed to the dismantler that properly identifies the vehicle and contains evidence of clearance by the department, including, but not limited to, a dismantling report number, temporary receipt number, or other proof of compliance with this section.

history: (History: Amended by Stats. 1997, Ch. 945, Sec. 15. Effective January 1, 1998.)


text: No person required to be licensed as an automobile dismantler under this code shall advertise the services of an automobile dismantler without indicating in the advertisement the occupational license or permit number of the automobile dismantler as issued by the department.

history: (History: Added by Stats. 1996, Ch. 265, Sec. 1. Effective January 1, 1997.)


text: The provisions of this chapter shall not prevent the local authorities of any city, city and county or county by ordinance, within the exercise of the police power of such city, city and county or county, from imposing local regulations with respect to traffic in loose vehicle parts and vehicle accessories.

history: (History: Added by Stats. 1961, Ch. 1640.)


text:
(a) A salvage pool shall maintain an accurate record of every vehicle it acquires and every vehicle it disposes of, and shall notify the department of the disposition of any vehicle pursuant to Section 5900.

(b) Whenever a salvage pool acquires a total loss salvage vehicle, a nonrepairable vehicle, or a recovered stolen vehicle and the license plates on the vehicle have not been removed pursuant to subdivision (a) of Section 11515, subdivision (a) of Section 11515.2, subdivision (e) of Section 11515.3, or any other provision of law, the salvage pool shall, prior to disposing of that vehicle, remove and submit the license plates to the department. The salvage pool shall maintain an accurate record of every license plate it acquires and disposes of, which records shall be maintained for two years and be open for inspection by any peace officer during the regular business hours of that salvage pool.

history: (History: Amended by Stats. 2024, Ch. 364, Sec. 2. (AB 1901) Effective January 1, 2025.)


text:
The department shall administer and enforce all provisions of this code pertaining to salvage pools.

This section shall become operative on July 1, 1987.

history: (History: Added by Stats. 1986, Ch. 952, Sec. 5. Section operative July 1, 1987, by its own provisions.)


text: It shall be unlawful for any lessor-retailer to make a retail sale of a vehicle of a type subject to registration without having first procured either a vehicle dealer license or a lessor-retailer license or temporary permit issued by the department or when such license or temporary permit issued by the department has been canceled, suspended, revoked, or invalidated or has expired.

history: (History: Added by Stats. 1976, Ch. 1284.)

chapter: 3.5. Lessor-Retailers

path: 5. OCCUPATIONAL LICENSING AND BUSINESS REGULATIONS > 3.5. Lessor-Retailers


text:
(a) Every lessor-retailer who sells at retail a vehicle of a type subject to registration shall make application to the department for a license. The applicant shall submit proof of his status as a bona fide lessor-retailer as may reasonably be required by the department.

(b) An application shall be made for the principal place of business, and a separate branch office application shall be made for each branch office location of the licensee as shall be operated and maintained by the applicant in conjunction with the retail sale or sales of vehicles.

(c) “Principal place of business,” for the purposes of this chapter, means the place designated by the lessor-retailer as the main business or office location in California whether or not retail sales are made from such location.


text:
(a) The department shall prescribe and provide forms to be used for application for licenses to be issued under the terms and provisions of this chapter and require of such applicants, where appropriate as a condition precedent to issuance of such license, such information, including but not limited to, fingerprints and personal history statements, touching on and concerning the applicant’s character, honesty, integrity and reputation as it may consider necessary; provided, however, that every application for a lessor-retailer license shall contain, in addition to such information that the department may require, a statement of the following facts:

(1) The name and residence address of the applicant and the trade name, if any, under which he intends to conduct his business; and if the applicant be a partnership, the name and residence address of each member thereof, whether a limited or general partner, and the name under which the partnership business is to be conducted; and if the applicant be a corporation, the name of the corporation and the name and address of each of its principal officers and directors.

(2) A complete description, including the city, town or village with the street and number, if any, of its principal place of business in California and such other and additional branch location or locations.

(b) Upon receipt of an application accompanied with the appropriate fee, the department shall make a thorough investigation of the information contained in the application.


text:
(a) The department may issue, or for reasonable cause shown, refuse to issue, a license to any applicant applying for a lessor-retailer license or branch office location.

(b) The license shall contain the applicant’s name, location address and the general distinguishing number assigned to the applicant.


text:
The department may refuse to issue a lessor-retailer license when it makes any of the following determinations:

(a) The applicant has outstanding an unsatisfied final court judgment rendered in connection with an activity licensed under the authority of this division.

(b) The applicant was previously the holder, or a managerial employee of the holder, of a license issued under this division which was revoked for cause and never reissued by the department, or which was suspended for cause and the terms of suspension have not been fulfilled.

(c) The applicant was previously a business representative whose license issued under this division was revoked for cause and never reissued or was suspended for cause and the terms of suspension have not been fulfilled.

(d) If the applicant is a business, a business representative was previously the holder of a license, or was a business representative of a business whose license, issued under this division, was revoked for cause and never reissued or was suspended for cause and the terms of suspension have not been fulfilled; or, by reason of the facts and circumstances related to the organization, control, and management of the business, the operation of that business will be directed, controlled, or managed by individuals who, by reason of their conviction of violations of this code, would be ineligible for a license and, by licensing that business, the purposes of this chapter would be defeated.

(e) The applicant, or a business representative if the applicant is a business, has been convicted of a crime or committed any act or engaged in conduct involving moral turpitude which is substantially related to the qualifications, functions, or duties of the licensed activity. A conviction after a plea of nolo contendere is a conviction within the meaning of this section.

(f) The applicant was previously the holder of an occupational license issued by another state, authorizing the same or similar activities of a license issued under this division; and that license was revoked or suspended for cause and was never reissued, or was suspended for cause, and the terms of suspension have not been fulfilled.

(g) The information contained in the application is incorrect.

(h) A decision of the department to cancel, suspend, or revoke a license has been made, and the applicant was a business representative of the business regulated under that license.

(i) The applicant does not have a principal place of business in California.

(j) The applicant has failed to pay the full amount of a claim paid by the Consumer Motor Vehicle Recovery Corporation, plus interest at the rate of 10 percent per annum, as described in subdivision (i) of Section 11703.

history: (History: Amended by Stats. 2007, Ch. 437, Sec. 3. Effective January 1, 2008.)


text: Any cause specified in this chapter as a cause to suspend or revoke the license issued to a lessor-retailer is a cause to refuse to issue a license to a lessor-retailer.

history: (History: Added by Stats. 1990, Ch. 1563, Sec. 33.)


text:
(a) The department, after notice and hearing, on an interim basis, may refuse to issue or may suspend a license issued under this chapter when the applicant or licensee, or a business representative if the applicant or licensee is a business, has been convicted of a crime involving moral turpitude which is substantially related to the qualifications, functions, or duties of the licensed activity, if an appeal of the conviction is pending or the conviction has otherwise not become final. A conviction after a plea of nolo contendere is a conviction within the meaning of this section.

(b) When a conviction, upon which an interim refusal to issue or suspension under subdivision (a) is based, is affirmed on appeal or otherwise becomes final, the refusal to issue or suspension shall automatically take effect as a denial or revocation, as the case may be, of the license. If the interim refusal to issue or suspension was stayed under probationary terms and conditions, the subsequent automatic denial or revocation shall also be stayed under the same terms and conditions for a term not to exceed the original term of probation for the interim refusal to issue or suspension.

(c) If a conviction, upon which an interim refusal to issue or suspension under subdivision (a) is based, is reversed on appeal, the refusal or suspension shall be set aside immediately by the department.

history: (History: Added by Stats. 1990, Ch. 1563, Sec. 34.)


text:
(a) Upon refusal of the department to issue a license to a lessor-retailer, the applicant shall be entitled to demand in writing a hearing before the director or his representative within 60 days after notice of refusal.

(b) The hearing shall be conducted pursuant to the provisions of Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.


text: Except where the provisions of this code require the refusal to issue a license, the department may issue a probationary license subject to conditions to be observed by the licensee in the exercise of the privilege granted. The conditions to be attached to the exercise of the privilege shall not appear on the face of the license but shall be such as may, in the judgment of the department, be in the public interest and suitable to the qualifications of the applicant as disclosed by the application and investigation by the department of the information contained therein.


text: Pending the satisfaction of the department that the applicant has met the requirements under this chapter, it may issue a temporary permit to any person applying for a lessor-retailer license or branch office location. The temporary permit shall permit the operation by the lessor-retailer while the department is completing its investigation and determination of all facts relative to the qualifications of the applicant to such license. The department may cancel such temporary permit when it has determined or has reasonable cause to believe that the application is incorrect or incomplete or the temporary permit was issued in error. Such temporary permit shall be invalid when canceled or when the applicant’s license has been issued or refused.

history: (History: Amended by Stats. 2018, Ch. 198, Sec. 18. (AB 3246) Effective January 1, 2019.)


text: The department may issue a certificate of convenience to the executor, executrix, administrator or administratrix of the estate of a deceased holder of a valid license issued under this chapter, or if no executor, executrix, administrator or administratrix has been appointed, and until a certified copy of an order making such appointment is filed with the department, to the widow or other heir otherwise entitled to conduct the business of the deceased, permitting such person to exercise the privileges granted by such license for a period of one year from and after the date of death and necessary one-year renewals thereafter, pending, but not later than, disposal of the business and qualification of the vendee of the business or such surviving widow, heir or other persons for such license under the provisions of this chapter. The department may restrict or condition the license and attach to the exercise of the privileges thereunder such terms and conditions as in its judgment the protection of the public requires.


text: Each office location operated and maintained by a lessor-retailer in conjunction with its retail sale of a vehicle or vehicles shall have posted in a place conspicuous to the public the license issued by the department to the lessor, and shall have erected or posted thereon such signs or devices providing information relating to the lessor-retailer’s name, the office location and the office address, to enable any person doing business with such lessor to identify him properly.


text:
Every lessor-retailer who displays or offers one or more used vehicles for sale at retail shall post a notice not less than 8 inches high and 10 inches wide, in a place conspicuous to the public, which states the following:

“The prospective purchaser of a vehicle may, at his or her own expense and with the approval of the lessor-retailer, have the vehicle inspected by an independent third party either on or off these premises.”

history: (History: Added by Stats. 1990, Ch. 1563, Sec. 35.)


text:
(a) If the lessor-retailer changes the location of its principal place of business or any branch office location in California, the lessor-retailer shall immediately upon making the change notify the department.

(b) If a lessor-retailer, for any reason, ceases to be in possession of its principal place of business or any branch office location, the lessor-retailer shall immediately notify the department, and shall deliver to the department the lessor-retailer license issued for the location, and, upon demand, all report of sale books in his or her possession.

(c) Any person licensed under this chapter who has closed his or her principal place of business may be served with process issued pursuant to Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code by registered mail at that place of business, unless the person has notified the department in writing of another address where service may be made.

history: (History: Amended by Stats. 1990, Ch. 216, Sec. 114.)


text:
(a) Before any lessor-retailer license shall be issued or renewed by the department to any applicant therefor, the applicant shall procure and file with the department a bond meeting the same requirements as specified for a vehicle dealer’s license in Sections 11710 and 11710.2.

(b) Any cause of action or claim specified in Section 11711 against a vehicle dealer’s bond shall also be a cause of action or claim against a lessor-retailer’s bond.

history: (History: Amended by Stats. 1982, Ch. 517, Sec. 395.)


text:
(a) The department, after notice and hearing, may suspend or revoke the license issued to a lessor-retailer upon determining that the person to whom the license was issued is not lawfully entitled thereto, or has done any of the following:

(1) Filed an application for the license using a false or fictitious name not registered with the proper authorities, or knowingly made any false statement or knowingly concealed any material fact, in the application for the license.

(2) Used a false or fictitious name, knowingly made any false statement or knowingly concealed any material fact in any application for the registration of a vehicle, or otherwise committed a fraud in the application.

(3) Knowingly purchased, sold, or otherwise acquired or disposed of a stolen motor vehicle.

(4) Violated any provision of Division 3 (commencing with Section 4000) or rule or regulation adopted pursuant thereto.

(5) Violated any provision of Division 4 (commencing with Section 10500) or rule or regulation adopted pursuant thereto.

(6) Violated any provision of this chapter or rule or regulation adopted pursuant thereto.

(7) Violated any provision of Chapter 2b (commencing with Section 2981) of Title 14 of Part 4 of Division 3 of the Civil Code or rule or regulation adopted pursuant thereto under the authority of Section 1651.

(8) Submitted a check, draft, or money order to the department for any obligation or fee due the state which was thereafter dishonored or refused payment upon presentation.

(9) Caused any person to suffer any loss or damage by reason of any fraud or deceit practiced on, or fraudulent representations made to, that person in the sale of a vehicle or parts or accessories thereof.

For purposes of this subdivision, “fraud” includes any act or omission which is included within the definition of either “actual fraud” or “constructive fraud” as defined in Sections 1572 and 1573 of the Civil Code, and “deceit” has the same meaning as defined in Section 1710 of the Civil Code. In addition, “fraud” and “deceit” include, but are not limited to, a misrepresentation in any manner, whether intentionally false or due to gross negligence, of a material fact; a promise or representation not made honestly and in good faith; an intentional failure to disclose a material fact; and any act within Section 484 of the Penal Code.

For purposes of this subdivision, “person” also includes a governmental entity.

(b) Any of the causes specified in this chapter as a cause for refusal to issue a license to a lessor-retailer applicant is cause to suspend or revoke a license issued to a lessor-retailer.

(c) Every hearing provided for in this section shall be conducted pursuant to Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.

history: (History: Amended by Stats. 1990, Ch. 1563, Sec. 36.)


text:
(a) After the filing of an accusation under this chapter, the director may enter into a stipulated compromise settlement agreement with the consent of the licensee on terms and conditions mutually agreeable to the director, the respondent licensee, and the accuser without further hearing or appeal. The agreement may include, but is not limited to, a period of probation or monetary penalties, or both. The monetary penalty shall not exceed one thousand dollars ($1,000) for each violation, and it shall be based on the nature of the violation and the effect of the violation on the purposes of this chapter.

(b) A compromise settlement agreement may be entered before, during, or after the hearing, but is valid only if executed and filed pursuant to subdivision (d) before the proposed decision of the hearing officer, if any, is adopted or the case is decided.

(c) The department shall adopt, by regulation, a schedule of maximum and minimum amounts of monetary penalties, the payment of which may be included as a term or condition of a compromise settlement agreement entered under subdivision (a). Any monetary penalty included in a compromise settlement agreement shall be within the range of monetary penalties in that schedule.

(d) Any compromise settlement agreement entered under this section shall be signed by the director, the respondent licensee, and the accuser, or by their authorized representatives. The director shall file, or cause to be filed, the agreement with the Office of Administrative Hearings, together with the department’s notice of withdrawal of the accusation or statement of issues upon which the action was initiated.

(e) If the respondent licensee fails to perform all of the terms and conditions of the compromise settlement agreement, the agreement is void and the department may take any action authorized by law notwithstanding the agreement, including, but not limited to, refiling the accusation or imposing license sanctions.

history: (History: Added by Stats. 1985, Ch. 1022, Sec. 18.)


text:
No lessor-retailer licensed under this chapter may do any of the following in connection with any activity for which this license is required:

(a) Make or disseminate, or cause to be made or disseminated, before the public in this state, in any newspaper or other publication, or any advertising device, or by oral representation, or in any other manner or means whatever, any statement that is untrue or misleading and that is known, or which by the exercise of reasonable care should be known, to be untrue or misleading; or make or disseminate, or cause to be made or disseminated, any statement as part of a plan or scheme with the intent not to sell any vehicle, or service so advertised, at the price stated therein, or as so advertised.

(b) Advertise, or offer for sale in any manner, any vehicle not actually for sale at the premises of the lessor-retailer or available within a reasonable time to the lessor-retailer at the time of the advertisement or offer.

(c) Fail within 48 hours to give, in writing, notification to withdraw any advertisement of a vehicle that has been sold or withdrawn from sale.

(d) Advertise any specific vehicle for sale without identifying the vehicle by its model, model year, and either its license number or that portion of the vehicle identification number that distinguishes the vehicle from all other vehicles of the same make, model, and model-year. Model-year is not required to be advertised for current model-year vehicles. Year models are no longer current when ensuing year models are available for purchase at retail in California.

(e) Advertise the total price of a vehicle without including all costs to the purchaser at the time of delivery at the lessor-retailer’s premises, except sales tax, vehicle registration fees, finance charges, certificate of compliance or noncompliance fees not exceeding thirty-five dollars ($35) pursuant to any statute, and any dealer documentary preparation charge. The dealer documentary charge shall not exceed thirty-five dollars ($35).

(f) (1) Fail to disclose, in an advertisement of a vehicle for sale, that there will be added to the advertised total price, at the time of sale, charges for sales tax, vehicle registration fees, the fee charged by the state for the issuance of any certificate of compliance or noncompliance pursuant to any statute, finance charges, or any dealer documentary preparation charge.

(2) For purposes of paragraph (1), “advertisement” means any advertisement in a newspaper, magazine, direct mail publication, or handbill that is two or more columns in width or one column in width and more than seven inches in length, or on any Web page of a lessor-retailer’s Web site that displays the price of a vehicle offered for sale on the Internet, as that term is defined in paragraph (6) of subdivision (e) of Section 17538 of the Business and Professions Code.

(g) Advertise or otherwise represent, or knowingly allow to be advertised or represented on the lessor-retailer’s behalf or at the lessor-retailer’s place of business, that no downpayment is required in connection with the sale of a vehicle when a downpayment is in fact required and the buyer is advised or induced to finance the downpayment by a loan in addition to any other loan financing the remainder of the purchase price of the vehicle. The terms “no downpayment,” “zero down delivers,” or similar terms shall not be advertised unless the vehicle will be sold to any qualified purchaser without a prior payment of any kind or trade-in.

(h) Refuse to sell a vehicle to any person at the advertised total price, exclusive of sales tax, vehicle registration fees, finance charges, certificate of compliance or noncompliance pursuant to any statute, and any dealer documentary preparation charge, which charges shall not exceed thirty-five dollars ($35) for the documentary preparation charge and thirty-five dollars ($35) for the certificate of compliance or noncompliance pursuant to any statute, while the vehicle remains unsold or unleased, unless the advertisement states the advertised total price is good only for a specified time and the time has elapsed.

(i) Engage in the business for which the licensee is licensed without having in force and effect a bond required by Section 11612.

(j) Engage in the business for which the lessor-retailer is licensed without at all times maintaining a principal place of business and any branch office location required by this chapter.

(k) Permit the use of the lessor-retailer license, supplies, or books by any other person for the purpose of permitting that person to engage in the sale of vehicles required to be registered under this code, or to permit the use of the lessor-retailer license, supplies, or books to operate a branch office location to be used by any other person, if, in either situation, the licensee has no financial or equitable interest or investment in the vehicles sold by, or the business of, or branch office location used by, the person, or has no interest or investment other than commissions, compensations, fees, or any other thing of value received for the use of the lessor-retailer license, supplies, or books to engage in the sale of vehicles.

(l) Violate any provision of Article 10 (commencing with Section 28050) of Chapter 5 of Division 12.

(m) Represent the dealer documentary preparation charge, or certificate of compliance or noncompliance fee, as a governmental fee.

(n) Advertise free merchandise, gifts, or services provided by a lessor-retailer contingent on the purchase of a vehicle. “Free” includes merchandise or services offered for sale at a price less than the lessor-retailer’s cost of the merchandise or services.

(o) Advertise vehicles and related goods or services with the intent not to supply reasonably expectable demand, unless the advertisement discloses a limitation of quantity.

(p) Use the term “rebate” or similar words such as “cash back” in advertising the sale of a vehicle.

(q) Require a person to pay a higher price for a vehicle and related goods or services for receiving advertised credit terms than the cash price the same person would have to pay to purchase the same vehicle and related goods or services. For the purpose of this subdivision, “cash price” has the meaning as defined in subdivision (e) of Section 2981 of the Civil Code.

(r) Misrepresent the authority of a representative or agent to negotiate the final terms of a transaction.

(s) Violate any law prohibiting bait and switch advertising, including, but not limited to, the guides against bait advertising set forth in Part 238 of Title 16 of the Code of Federal Regulations, as those regulations read on January 1, 1988.

(t) Make any untrue or misleading statement indicating that a vehicle is equipped with all the factory installed optional equipment the manufacturer offers, including, but not limited to, a false statement that a vehicle is “fully factory equipped.”

(u) Advertise any underselling claim, such as “we have the lowest prices” or “we will beat any dealer’s price,” unless the lessor-retailer has conducted a recent survey showing that the lessor-retailer sells its vehicles at lower prices than any other licensee in its trade area and maintains records to adequately substantiate the claim. The substantiating records shall be made available to the department upon request.

(v) To display or offer for sale any used vehicle unless there is affixed to the vehicle the Federal Trade Commission’s Buyer’s Guide as required by Part 455 of Title 16 of the Code of Federal Regulations.

(w) This section shall become operative on July 1, 2001.

history: (History: Amended by Stats. 2002, Ch. 947, Sec. 1. Effective January 1, 2003.)


text:
No lessor-retailer licensed under this chapter may do any of the following in connection with any activity for which this license is required:

(a) Use a picture in connection with any advertisement of the price of a specific vehicle or class of vehicles, unless the picture is of the year, make, and model being offered for sale. The picture may not depict a vehicle with optional equipment or a design not actually offered at the advertised price.

(b) Advertise a vehicle for sale that was used by the selling lessor-retailer in its business as a demonstrator, executive vehicle, service vehicle, rental, loaner, or lease vehicle, unless the advertisement clearly and conspicuously discloses the previous use made by that licensee of the vehicle. An advertisement may not describe any of those vehicles as “new.”

(c) Advertise any used vehicle of the current or prior model-year without expressly disclosing the vehicle as “used,” “previously owned,” or a similar term that indicates that the vehicle is used, as defined in this code.

(d) Use the terms “on approved credit” or “on credit approval” in an advertisement for the sale of a vehicle unless those terms are clearly and conspicuously disclosed and unabbreviated.

(e) Advertise an amount described by terms such as “unpaid balance” or “balance can be financed” unless the total sale price is clearly and conspicuously disclosed and is in close proximity to the advertised balance.

(f) Advertise credit terms that fail to comply with the disclosure requirements of Section 226.24 of Title 12 of the Code of Federal Regulations. Advertisements of terms that include escalated payments, balloon payments, or deferred downpayments shall clearly and conspicuously identify those payments as to amounts and time due.

(g) Advertise claims such as “everyone financed,” “no credit rejected,” or similar claims unless the dealer is willing to extend credit to any person under any and all circumstances.

(h) Advertise the amount of any downpayment unless it represents the total payment required of a purchaser prior to delivery of the vehicle, including any payment for sales tax or license. A statement such as “$____ delivers,” is an example of an advertised downpayment.

(i) Fail to clearly and conspicuously disclose in an advertisement for the sale of a vehicle any disclosure required by this code or any qualifying term used in conjunction with advertised credit terms. Unless otherwise provided by statute, the specific size of disclosures or qualifying terms is not prescribed.

history: (History: Amended by Stats. 2003, Ch. 62, Sec. 302. Effective January 1, 2004.)


text:
It shall be unlawful and a violation of this code for a lessor-retailer licensed under this chapter when selling at retail a vehicle in a transaction for which this license is required:

(a) To deliver, following sale, a vehicle for operation on California highways, if such vehicle does not meet all of the equipment requirements of Division 12 (commencing with Section 24000) of this code.

(b) To fail to deliver to a transferee lawfully entitled thereto a properly endorsed certificate of ownership.

(c) To violate any of the terms or provisions of Part 5 (commencing with Section 10701) of Division 2 of the Revenue and Taxation Code or rules and regulations adopted pursuant thereto or adopted pursuant to Section 1651 of this code.

(d) To take a vehicle in trade in part or total payment for a vehicle sold by the lessor-retailer.

(e) To sell a vehicle which has not been previously leased, bailed or rented or acquired or contracted for lease or rental by the lessor-retailer.

(f) To display a vehicle for sale at a location other than the principal place of business or branch office authorized by the department for that lessor-retailer.

history: (History: Amended by Stats. 1990, Ch. 1563, Sec. 36.7.)


text: It is unlawful and a violation of this code for a person holding a license under this chapter to make a retail sale of a motor vehicle, except to the lessee of such vehicle, required to be registered pursuant to Division 3 (commencing with Section 4000) or subject to identification pursuant to Division 16.5 (commencing with Section 38000) if such person files with the department a report of sale as provided in Section 4456 with respect to such retail sale, without making the return and payment of any sales tax due and required by Section 6451 of the Revenue and Taxation Code.

history: (History: Amended by Stats. 1979, Ch. 373.)


text: If a purchaser of a vehicle pays to the lessor-retailer an amount for the licensing or transfer of title of the vehicle, which amount is in excess of the actual fees due for such licensing or transfer, or which amount is in excess of the amount which has been paid, prior to the sale, by the lessor-retailer to the state in order to avoid penalties that would have accrued because of late payment of such fees, the lessor-retailer shall return such excess amount to the purchaser, whether or not such purchaser requests the return of the excess amount.


text:
(a) The license provided for in this chapter shall be automatically canceled upon the happening of any of the following:

(1) The abandonment of the principal place of business of the lessor-retailer or the change thereof without notice to the department as provided in Section 11610.

(2) The failure of the licensee to maintain an adequate bond or to procure and file another bond as required by Section 11612 prior to the effective date of the termination by the surety of any existing bond.

(3) The voluntary or involuntary surrender for any cause by the licensee of the license, except that a surrender of the license, or cessation of business by the licensee, or the suspension or revocation of the corporate status of the licensee, does not preclude the filing of an accusation for revocation or suspension of the surrendered license as provided in Section 11613, and does not affect the department’s decision to suspend or revoke the license. The department’s determination to suspend or revoke the license may be considered in issuing or refusing to issue any subsequent license authorized by this division to that licensee or any business representative of that licensee.

(4) Notification to the department that the person designated as licensee has changed.

(5) The suspension or cancellation of the corporate status of the licensee.

(6) The suspension, revocation, or cancellation of the seller’s permit of the licensee by the California Department of Tax and Fee Administration pursuant to Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code.

(b) The branch office location license provided for in this chapter shall be automatically canceled upon the abandonment of the branch office location of the lessor-retailer or the change of that branch office without notice to the department as provided in Section 11610.

history: (History: Amended by Stats. 2022, Ch. 295, Sec. 9. (AB 2956) Effective January 1, 2023.)


text:
The department may, pending a hearing, temporarily suspend the license issued to a lessor-retailer for a period not to exceed 30 days, if the director finds that such action is required in the public interest. In any such case a hearing shall be held and a decision thereon issued within 30 days after notice of the temporary suspension.

Every hearing as provided for in this section shall be pursuant to the provisions of Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.


text:
(a) Every occupational license issued under this chapter shall be valid for a period of one year from midnight of the last day of the month of issuance. Except as provided in subdivision (c), renewal of an occupational license for the ensuing year may be obtained by the person to whom the occupational license was issued upon application to the department and payment of the fee provided in this code.

(b) Every application for the renewal of an occupational license which expires pursuant to this section shall be made by the person to whom issued not more than 90 days prior to the expiration date, and shall be made by presenting the completed application form provided by the department and by payment of the full annual renewal fee for the occupational license.

(c) If the application for renewal of the occupational license is not made by midnight of the expiration date, the application may be made within 30 days following expiration of the license by paying the annual renewal fee and a penalty fee equal to the amount of the original application fee for each occupational license held.

(d) In no event may the licensee renew the occupational license after the expiration of the 30-day period authorized in subdivision (c).

history: (History: Amended by Stats. 1984, Ch. 499, Sec. 11.)


text: No person shall act as a dealer, remanufacturer, manufacturer, or transporter, or as a manufacturer branch, remanufacturer branch, distributor, or distributor branch, without having first been issued a license as required in Section 11701 or temporary permit issued by the department, except that, when the license or temporary permit has been canceled, suspended, or revoked or has expired, any vehicle in the dealer’s inventory and owned by the dealer when the dealer ceased to be licensed may be sold at wholesale to a licensed dealer. The former licensee shall give the purchasing dealer a statement of facts stating that the seller is not a licensed dealer. Any vehicle on consignment with the dealer when the dealer ceased to be licensed shall be returned to the consignor. Any vehicle in the dealer’s possession, but not owned by the dealer and not on consignment when the dealer ceased to be licensed, shall be returned to the owner of the vehicle.

history: (History: Amended by Stats. 1990, Ch. 1563, Sec. 38.)

path: 5. OCCUPATIONAL LICENSING AND BUSINESS REGULATIONS > 4. Manufacturers, Transporters, Dealers, and Salesmen > 1. Issuance of Licenses and Certificates to Manufacturers, Transporters, and Dealers


text: A dealer who does not have an established place of business in this state but who is currently authorized to do business as, and who has an established place of business as, a vehicle dealer in another state is not subject to licensure under this article if the business transacted in California is limited to the importation of vehicles for sale to, or the export of vehicles purchased from, persons licensed in California under this chapter.

history: (History: Added by Stats. 1979, Ch. 1088.)

chapter: 4. Manufacturers, Transporters, Dealers, and Salesmen

article: 1. Issuance of Licenses and Certificates to Manufacturers, Transporters, and Dealers


text: A dealer who obtains an autobroker’s endorsement to his or her dealer’s license is subject to all of the licensing, advertising, and other statutory and regulatory requirements and prohibitions applicable to a dealer, regardless of whether that dealer acts as the buyer of a vehicle, the seller of a vehicle, or provides brokering services on behalf of another or others for the purpose of arranging, negotiating, assisting, or effectuating the sale of a vehicle not owned by that dealer.

history: (History: Added by Stats. 1995, Ch. 211, Sec. 4. Effective January 1, 1996.)


text: No person may aid and abet a person in the performance of any act in violation of this chapter.

history: (History: Added by Stats. 2002, Ch. 407, Sec. 1. Effective January 1, 2003.)


text: Every manufacturer, manufacturer branch, remanufacturer, remanufacturer branch, distributor, distributor branch, transporter, or dealer of vehicles of a type subject to registration, or snowmobiles, motorcycles, all-terrain vehicles, or trailers of a type subject to identification, shall make application to the department for a license containing a general distinguishing number. The applicant shall submit proof of his or her status as a bona fide manufacturer, manufacturer branch, remanufacturer, remanufacturer branch, distributor, distributor branch, transporter, or dealer as may reasonably be required by the department.

history: (History: Amended by Stats. 2004, Ch. 836, Sec. 8. Effective January 1, 2005.)


text: The department may issue, or for reasonable cause shown, refuse to issue a license to any applicant applying for a manufacturer's, manufacturer’s branch, remanufacturer's, remanufacturer’s branch, distributor's, distributor’s branch, transporter's, or dealer’s license.

history: (History: Amended by Stats. 1983, Ch. 1286, Sec. 26.)


text:
The department may refuse to issue a license to a manufacturer, manufacturer branch, remanufacturer, remanufacturer branch, distributor, distributor branch, transporter, or dealer, if it determines any of the following:

(a) The applicant was previously the holder, or a managerial employee of the holder, of a license issued under this chapter which was revoked for cause and never reissued by the department, or which was suspended for cause and the terms of suspension have not been fulfilled.

(b) The applicant was previously a business representative of a business whose license issued under this chapter was revoked for cause and never reissued or was suspended for cause and the terms of suspension have not been fulfilled.

(c) If the applicant is a business, a business representative of the business was previously the holder of a license, or was a business representative of a business whose license, issued under this chapter was revoked for cause and never reissued or was suspended for cause and the terms of suspension have not been fulfilled; or, by reason of the facts and circumstances related to the organization, control, and management of the business, the operation of that business will be directed, controlled, or managed by individuals who, by reason of their conviction of violations of the provisions of this code, would be ineligible for a license and, by licensing the business, the purposes of this chapter would be defeated.

(d) The applicant, or a business representative if the applicant is a business, has been convicted of a crime or committed an act or engaged in conduct involving moral turpitude which is substantially related to the qualifications, functions, or duties of the licensed activity. A conviction after a plea of nolo contendere is a conviction within the meaning of this section.

(e) The applicant was previously the holder of an occupational license issued by another state, authorizing the same or similar activities of a license issued under this division; and that license was revoked or suspended for cause and was never reissued, or was suspended for cause, and the terms of suspension have not been fulfilled.

(f) The information contained in the application is incorrect.

(g) Upon investigation, the business history required by Section 11704 contains incomplete or incorrect information, or reflects substantial business irregularities.

(h) A decision of the department to cancel, suspend, or revoke a license has been made and the applicant was a business representative of the business regulated under that license.

(i) The applicant has failed to repay the full amount of a claim paid by the Consumer Motor Vehicle Recovery Corporation, plus interest at the rate of 10 percent per annum. The dealer or lessor-retailer’s discharge in bankruptcy shall not relieve the dealer or lessor-retailer from the provisions of this subdivision, except to the extent, if any, mandated by bankruptcy law.

history: (History: Amended by Stats. 2007, Ch. 437, Sec. 4. Effective January 1, 2008.)


text: Any of the causes specified in this chapter as a cause to suspend or revoke the license issued to a dealer, manufacturer, manufacturer branch, remanufacturer, remanufacturer branch, distributor, distributor branch, or transporter, is cause to refuse to issue a license to a dealer, manufacturer, manufacturer branch, remanufacturer, remanufacturer branch, distributor, distributor branch, or transporter.

history: (History: Amended by Stats. 1990, Ch. 1563, Sec. 40.)


text:
The department may refuse to issue a license to a manufacturer, manufacturer branch, remanufacturer, remanufacturer branch, distributor, distributor branch, transporter, or dealer, when the department determines that either of the following apply to the applicant:

(a) An outstanding and unsatisfied final judgment rendered against the applicant exists in connection with the purchase, sale, or lease of any vehicle.

(b) An outstanding and unsatisfied restitution order issued against the applicant under subdivision (a) of Section 11519.1 of the Government Code exists.

history: (History: Amended by Stats. 2007, Ch. 93, Sec. 2. Effective January 1, 2008.)


text: A person whose license has been revoked or whose application for a license has been denied may reapply for a license after a period of not less than one year has elapsed from the effective date of the decision revoking the license or denying the application; except that if the decision was entered under the authority of subdivision (a), (b), (c), or (g) of Section 11703, or 11703.2, or paragraph (6) of subdivision (a) of Section 11705, a reapplication accompanied by evidence satisfactory to the department that such grounds no longer exist may be made earlier than such one-year period.

history: (History: Amended by Stats. 1976, Ch. 934.)


text: The department may refuse to issue a license to a dealer when it determines that an applicant for a dealer’s license has failed to effectively endorse an authorization for disclosure of an account or accounts relating to the operation of the dealership as provided for in Section 7473 of the Government Code.

history: (History: Added by Stats. 1976, Ch. 1320.)


text:
(a) Every applicant who applies for a license pursuant to Section 11701 shall submit an application to the department on the forms prescribed by the department. Such applicant shall provide the department with information as to the applicant’s character, honesty, integrity, and reputation, as the department may consider necessary. The department, by regulation, shall prescribe what information is required of such an applicant for the purposes of this subdivision.

(b) Upon receipt of an application for a license which is accompanied by the appropriate fee, the department shall, within 120 days, make a thorough investigation of the information contained in the application.

(c) Every person holding a license issued pursuant to Section 11701 shall notify the department, within 10 days, of any change in the ownership or corporate structure of the licensee.

history: (History: Repealed and added by Stats. 1977, Ch. 452.)


text:
(a) Except as provided in subdivision (e), every person who applies for a dealer’s license pursuant to Section 11701 for the purpose of transacting sales of used vehicles on a retail or wholesale basis only shall be required to take and successfully complete a written examination prepared and administered by the department before a license may be issued. The examination shall include, but need not be limited to, all of the following laws and subjects:

(1) Division 12 (commencing with Section 24000), relating to equipment of vehicles.

(2) Advertising.

(3) Odometers.

(4) Vehicle licensing and registration.

(5) Branch locations.

(6) Offsite sales.

(7) Unlawful dealer activities.

(8) Handling, completion, and disposition of departmental forms.

(b) Prior to the first taking of an examination under subdivision (a), every applicant shall successfully complete a preliminary educational program of not less than four hours. The program shall address, but not be limited to, all of the following topics:

(1) Chapter 2B (commencing with Section 2981) of Title 14 of Part 4 of Division 3 of the Civil Code, relating to motor vehicle sales finance.

(2) Motor vehicle financing.

(3) Truth in lending.

(4) Sales and use taxes.

(5) Division 12 (commencing with Section 24000), relating to equipment of vehicles.

(6) Advertising.

(7) Odometers.

(8) Vehicle licensing and registration.

(9) Branch locations.

(10) Offsite sales.

(11) Unlawful dealer activities.

(12) Air pollution control requirements.

(13) Regulations of the Bureau of Automotive Repair.

(14) Handling, completion, and disposition of departmental forms.

(c) (1) Except as provided in paragraph (2) or (3), every dealer who is required to complete a written examination and an educational program pursuant to subdivisions (a) and (b) and who is thereafter issued a dealer’s license shall successfully complete, every two years after issuance of that license, an educational program of not less than four hours that offers instruction in the subjects listed under subdivision (a) and the topics listed under subdivision (b), in order to maintain or renew that license.

(2) A dealer is not required to complete the educational program set forth in paragraph (1) if the educational program is completed by a managerial employee employed by the dealer.

(3) Paragraph (1) does not apply to dealers who sell vehicles on a wholesale basis only and who, in a one-year period, deal with less than 50 vehicles that are subject to registration.

(d) Instruction described in subdivisions (b) and (c) may be provided by generally accredited educational institutions, private vocational schools, and educational programs and seminars offered by professional societies, organizations, trade associations, and other educational and technical programs that meet the requirements of this section or by the department.

(e) This section does not apply to any of the following:

(1) An applicant for a new vehicle dealer’s license or any employee of that dealer.

(2) A person who holds a valid license as an automobile dismantler, an employee of that dismantler, or an applicant for an automobile dismantler’s license.

(3) An applicant for a motorcycle only dealer’s license or any employee of that dealer.

(4) An applicant for a trailer only dealer’s license or any employee of that dealer.

(5) An applicant for an all-terrain only dealer’s license or any employee of that dealer.

history: (History: Amended by Stats. 2004, Ch. 836, Sec. 9. Effective January 1, 2005.)


text: Every person who applies to the department to take or retake the examination required under Section 11704.5 shall pay to the department a fee of sixteen dollars ($16).

history: (History: Added by Stats. 1996, Ch. 1008, Sec. 4. Effective January 1, 1997.)


text:
(a) The department, after notice and hearing, may suspend or revoke the license issued to a dealer, transporter, manufacturer, manufacturer branch, remanufacturer, remanufacturer branch, distributor, or distributor branch upon determining that the person to whom the license was issued is not lawfully entitled thereto, or has done any of the following:

(1) Filed an application for the license using a false or fictitious name not registered with the proper authorities, or knowingly made a false statement or knowingly concealed a material fact, in the application for the license.

(2) Made, or knowingly or negligently permitted, an illegal use of the special plates issued to the licensee.

(3) Used a false or fictitious name, knowingly made a false statement, or knowingly concealed a material fact, in an application for the registration of a vehicle, or otherwise committed a fraud in the application.

(4) Failed to deliver to a transferee lawfully entitled thereto a properly endorsed certificate of ownership.

(5) Knowingly purchased, sold, or otherwise acquired or disposed of a stolen motor vehicle.

(6) Failed to provide and maintain a clear physical division between the type of business licensed pursuant to this chapter and any other type of business conducted at the established place of business.

(7) Willfully violated Section 3064, 3065, 3074, or 3075 or any rule or regulation adopted pursuant thereto.

(8) Violated any provision of Division 3 (commencing with Section 4000) or any rule or regulation adopted pursuant thereto, or subdivision (a) of Section 38200.

(9) Violated any provision of Division 4 (commencing with Section 10500) or any rule or regulation adopted pursuant thereto.

(10) Violated any provision of Article 1 (commencing with Section 11700) of, or Article 1.1 (commencing with Section 11750) of, Chapter 4 of Division 5 or any rule or regulation adopted pursuant thereto.

(11) Violated any provision of Part 5 (commencing with Section 10701) of Division 2 of the Revenue and Taxation Code or any rule or regulation adopted pursuant thereto.

(12) Violated any provision of Chapter 2b (commencing with Section 2981) of Title 14 of Part 4 of Division 3 of the Civil Code or any rule or regulation adopted pursuant thereto.

(13) Submitted a check, draft, or money order to the department for any obligation or fee due the state which was dishonored or refused payment upon presentation.

(14) (A) Has caused any person to suffer any loss or damage by reason of any fraud or deceit practiced on that person or fraudulent representations made to that person in the course of the licensed activity.

(B) For purposes of this paragraph, “fraud” includes any act or omission which is included within the definition of either “actual fraud” or “constructive fraud” as defined in Sections 1572 and 1573 of the Civil Code, and “deceit” has the same meaning as defined in Section 1710 of the Civil Code. In addition, “fraud” and “deceit” include, but are not limited to, a misrepresentation in any manner, whether intentionally false or due to gross negligence, of a material fact; a promise or representation not made honestly and in good faith; an intentional failure to disclose a material fact; and any act within Section 484 of the Penal Code.

(C) For purposes of this paragraph, “person” also includes a governmental entity.

(15) Failed to meet the terms and conditions of an agreement entered into pursuant to Section 11707.

(16) Violated Section 43151, 43152, or 43153 of, or subdivision (b) of Section 44072.10 of, the Health and Safety Code.

(17) Failed to repay a claim paid by the Consumer Motor Vehicle Recovery Corporation as provided in subdivision (i) of Section 11703.

(18) As a buy-here-pay-here dealer, violated any provision of Chapter 11 (commencing with Section 7500) of Division 3 of the Business and Professions Code or any rule or regulation adopted pursuant to those provisions.

(b) Any of the causes specified in this chapter as a cause for refusal to issue a license to a transporter, manufacturer, manufacturer branch, remanufacturer, remanufacturer branch, distributor, distributor branch, or dealer applicant is cause to suspend or revoke a license issued to a transporter, manufacturer, manufacturer branch, remanufacturer, remanufacturer branch, distributor, distributor branch, or dealer.

(c) Except as provided in Section 11707, every hearing provided for in this section shall be conducted pursuant to Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.

history: (History: Amended by Stats. 2016, Ch. 682, Sec. 3. (AB 287) Effective January 1, 2017.)


text:
(a) The department, after notice and hearing, may suspend or revoke the license issued to a dealer, transporter, manufacturer, manufacturer branch, distributor, or distributor branch upon determining that the person to whom the license was issued is not lawfully entitled thereto or has willfully violated the terms and conditions of any warranty responsibilities as set forth in Title 1.7 (commencing with Section 1790) of Part 4 of Division 3 of the Civil Code.

(b) Every hearing as provided for in this section shall be pursuant to the provisions of Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.

history: (History: Amended by Stats. 1977, Ch. 873.)


text:
The department may, pending a hearing, temporarily suspend the license and special plates issued to a manufacturer, manufacturer branch, remanufacturer, remanufacturer branch, distributor, distributor branch, transporter, or dealer, for a period not to exceed 30 days, if the director finds that such action is required in the public interest. In any such case, a hearing shall be held and a decision thereon issued within 30 days after notice of the temporary suspension.

Every hearing, as provided for in this section, shall be conducted pursuant to Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.

history: (History: Amended by Stats. 1983, Ch. 1286, Sec. 32.)


text:
(a) After the filing of an accusation under this article, the director may enter into a stipulated compromise settlement agreement with the consent of the licensee on terms and conditions mutually agreeable to the director, the respondent licensee, and the accuser without further hearing or appeal. The agreement may include, but is not limited to, a period of probation or monetary penalties, or both. Except as provided in Section 11728, the monetary penalty shall not exceed one thousand dollars ($1,000) for each violation, and it shall be based on the nature of the violation and the effect of the violation on the purposes of this article.

(b) A compromise settlement agreement may be entered before, during, or after the hearing, but is valid only if executed and filed pursuant to subdivision (d) before the proposed decision of the hearing officer, if any, is adopted or the case is decided.

(c) The department shall adopt, by regulation, a schedule of maximum and minimum amounts of monetary penalties, the payment of which may be included as a term or condition of a compromise settlement agreement entered under subdivision (a). Any monetary penalty included in a compromise settlement agreement shall be within the range of monetary penalties in that schedule.

(d) Any compromise settlement agreement entered under this section shall be signed by the director, the respondent licensee, and the accuser, or by their authorized representatives. The director shall file, or cause to be filed, the agreement with the Office of Administrative Hearings, together with the department’s notice of withdrawal of the accusation or statement of issues upon which the action was initiated.

(e) If the respondent licensee fails to perform all of the terms and conditions of the compromise settlement agreement, the agreement is void and the department may take any action authorized by law, notwithstanding the agreement, including, but not limited to, refiling the accusation or imposing license sanctions.

history: (History: Amended by Stats. 1990, Ch. 90, Sec. 3. Effective May 9, 1990.)


text:
(a) Upon refusal of the department to issue a license and special plates to a manufacturer, manufacturer branch, remanufacturer, remanufacturer branch, distributor, distributor branch, transporter, or dealer, the applicant shall be entitled to demand, in writing, a hearing before the director or his or her representative within 60 days after notice of refusal.

(b) The hearing shall be conducted pursuant to Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.

history: (History: Amended by Stats. 1983, Ch. 1286, Sec. 33.)


text:
(a) A dealer’s established place of business, and other sites or locations as may be operated and maintained by the dealer in conjunction with his or her established place of business, shall have posted, in a place conspicuous to the public in each and every location, the license, or a true and exact copy of the license, issued by the department to the dealer and to each salesperson employed by the dealer and shall have erected or posted thereon signs or devices providing information relating to the dealer’s name and the location and address of the dealer’s established place of business to enable any person doing business with the dealer to identify him or her properly. A sign erected or posted pursuant to this subdivision, on an established place of business, shall have an area of not less than two square feet per side displayed and shall contain lettering of sufficient size to enable the sign to be read from a distance of at least 50 feet. This section shall not apply to a dealer who is a wholesaler involved for profit only in the sale of vehicles between licensed dealers.

(b) Notwithstanding Section 11704 and this section, a dealer may display vehicles at a fair, exposition, or similar exhibit without securing a branch license, if no actual sales are made at those events and the display does not exceed 30 days.

(c) A vehicle displayed pursuant to subdivision (b) or (e) shall be identified by a sign or device providing information relating to the dealer’s name and the location and address of the dealer’s established place of business.

(d) This section shall not be applicable to a dealer who deals only in off-highway vehicles subject to identification, as defined in Section 38012.

(e) Notwithstanding Section 11704 and this section, a vessel dealer may display a trailer and may sell a trailer in conjunction with the sale of a vessel at a fair, exposition, or similar exhibit without securing a branch license if the display does not exceed 30 days.

history: (History: Amended by Stats. 2010, Ch. 483, Sec. 1. (SB 1004) Effective January 1, 2011.)


text:
Every dealer who displays or offers one or more used vehicles for sale at retail shall post a notice not less than 8 inches high and 10 inches wide, in a place conspicuous to the public, which states the following:

“The prospective purchaser of a 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 these premises.”

history: (History: Added by Stats. 1990, Ch. 1563, Sec. 42.)


text:
(a) Every dealer shall conspicuously display a notice, not less than 8 inches high and 10 inches wide, in each sales office and sales cubicle of a dealer’s established place of business where written terms of specific sale or lease transactions are discussed with prospective purchasers or lessees, and in each room of a dealer’s established place of business where sale and lease contracts are regularly executed, which states the following:

“THERE IS NO COOLING-OFF PERIOD UNLESS YOU OBTAIN A CONTRACT CANCELLATION OPTION

California law does not provide for a “cooling-off” or other cancellation period for vehicle lease or purchase 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 cause, such as fraud.

However, California law does require a seller to offer a 2-day contract cancellation option on used vehicles with a purchase price of less than $40,000, subject to certain statutory conditions. This contract cancellation option requirement does not apply to the sale of a recreational vehicle, a motorcycle, or an off-highway motor vehicle subject to identification under California law. See the vehicle contract cancellation option agreement for details.”

(b) This section shall remain in effect only until October 1, 2026, and as of that date is repealed.

history: (History: Amended by Stats. 2025, Ch. 354, Sec. 8. (SB 766) Effective January 1, 2026. Repealed as of October 1, 2026, by its own provisions. See later operative version as added by Sec. 9 of Stats. 2025, Ch. 354.)


text:
(a) Every dealer shall conspicuously display a physical notice, in at least 36-point type, in each sales office and sales cubicle of a dealer’s established place of business where written terms of specific sale or lease transactions are discussed with prospective purchasers or lessees, and in each room of a dealer’s established place of business where sale and lease contracts are regularly executed that states the following:“CALIFORNIA DOES NOT HAVE A COOLING-OFF PERIOD FOR NEW VEHICLES. BUT IF YOU PURCHASED OR LEASED A USED VEHICLE FOR $50,000 OR LESS, YOU HAVE 3 DAYS TO CANCEL THIS CONTRACT FOR ANY REASON. ADDITIONAL RESTRICTIONS MAY APPLY, INCLUDING A RESTOCKING FEE. ASK THE DEALER FOR MORE INFORMATION ABOUT HOW TO EXERCISE THIS RIGHT.”(b) If the dealer also sells or leases motorcycles or off-highway motor vehicles at the same location as vehicles subject to the right to cancel, the physical notice shall contain the following additional language, in at least 36-point type:

“This cooling-off period also does not apply to the sale of a motorcycle or an off-highway motor vehicle subject to registration under California law. See the vehicle contract for details.”

(c) This section shall become operative October 1, 2026.

history: (History: Repealed (in Sec. 8) and added by Stats. 2025, Ch. 354, Sec. 9. (SB 766) Effective January 1, 2026. Operative October 1, 2026, by its own provisions.)


text:
(a) Every dealer shall clearly and conspicuously display in its showroom at its established place of business, in a place that is easily accessible to prospective purchasers, a clear and conspicuous listing of each vehicle that the dealer has advertised for sale if the vehicle meets all of the following requirements:

(1) The vehicle is advertised for sale in a newspaper or other publication of general circulation, or in any other advertising medium that is disseminated to the public generally, including, but not limited to, radio, television, or the Internet.

(2) The vehicle is advertised at a specific price and is required pursuant to subdivision (a) of Section 11713.1 to be identified in the advertisement by its vehicle identification number or license number.

(3) The vehicle has not been sold or leased during the time that the advertised price is valid.

(4) The vehicle does not clearly and conspicuously have displayed on or in it the advertised price.

(b) The listing required by subdivision (a) may be satisfied by clearly and conspicuously posting in the showroom a complete copy of any print advertisement that includes vehicles currently advertised for sale or by clearly and conspicuously displaying in the showroom a list of currently advertised vehicles described by make, model, model-year, vehicle identification number, or license number, and the advertised price.

history: (History: Added by Stats. 2001, Ch. 441, Sec. 1. Effective January 1, 2002.)


text:
(a) When a dealer purchases or obtains a vehicle in trade in a retail sale or lease transaction and the vehicle is subject to a prior credit or lease balance, all of the following apply:

(1) If the dealer agreed to pay a specified amount on the prior credit or lease balance owing on the vehicle purchased or obtained in trade, and the agreement to pay the specified amount is contained in a written agreement documenting the transaction, the dealer shall tender the agreed upon amount as provided in the written agreement to the lessor registered in accordance with Section 4453.5, or to the legal owner reflected on the ownership certificate, or to the designee of that lessor or legal owner of the vehicle purchased or obtained in trade within 21 calendar days of purchasing or obtaining the vehicle in trade.

(2) If the dealer did not set forth an agreement regarding payment of a prior credit or lease balance owed on the vehicle purchased or obtained in trade, in a written agreement documenting the transaction, the dealer shall tender to the lessor registered in accordance with Section 4453.5, or to the legal owner reflected on the ownership certificate, or to the designee of that lessor or legal owner of the vehicle purchased or obtained in trade, an amount necessary to discharge the prior credit or lease balance owing on the vehicle purchased or obtained in trade within 21 calendar days of purchasing or obtaining the vehicle in trade.

(3) The time period specified in paragraph (1) or (2) may be shortened if the dealer and consumer agree, in writing, to a shorter time period.

(4) A dealer shall not sell, consign for sale, or transfer any ownership interest in the vehicle purchased or obtained in trade until an amount necessary to discharge the prior credit or lease balance owing on the vehicle has been tendered to the lessor registered in accordance with Section 4453.5, or to the legal owner reflected on the ownership certificate, or to the designee of that lessor or legal owner of the vehicle purchased or obtained in trade.

(b) A dealer does not violate this section if the dealer reasonably and in good faith gives notice of rescission of the contract promptly, but no later than 21 days after the date on which the vehicle was purchased or obtained in trade, and the contract is thereafter rescinded on any of the grounds in Section 1689 of the Civil Code.

history: (History: Amended by Stats. 2010, Ch. 328, Sec. 228. (SB 1330) Effective January 1, 2011.)


text:
(a) Before any dealer’s or remanufacturer’s license is issued or renewed by the department to any applicant therefor, the applicant shall procure and file with the department a bond executed by an admitted surety insurer, approved as to form by the Attorney General, and conditioned that the applicant shall not practice any fraud or make any fraudulent representation which will cause a monetary loss to a purchaser, seller, financing agency, or governmental agency.

(b) A dealer’s bond shall be in the amount of fifty thousand dollars ($50,000), except the bond of a dealer who deals exclusively in motorcycles or all-terrain vehicles shall be in the amount of ten thousand dollars ($10,000). Before the license is renewed by the department, the dealer, other than a dealer who deals exclusively in motorcycles or all-terrain vehicles, shall procure and file a bond in the amount of fifty thousand dollars ($50,000). A remanufacturer bond shall be in the amount of fifty thousand dollars ($50,000).

(c) Liability under the bond is to remain at full value. If the amount of liability under the bond is decreased or there is outstanding a final court judgment for which the dealer or remanufacturer and sureties are liable, the dealer’s or remanufacturer’s license shall be automatically suspended. In order to reinstate the license and special plates, the licensee shall either file an additional bond or restore the bond on file to the original amount, or shall terminate the outstanding judgment for which the dealer or remanufacturer and sureties are liable.

(d) A dealer’s or remanufacturer’s license, or renewal of the license, shall not be issued to any applicant therefor, unless and until the applicant files with the department a good and sufficient instrument, in writing, in which the applicant appoints the director as the true and lawful agent of the applicant upon whom all process may be served in any action, or actions, which may thereafter be commenced against the applicant, arising out of any claim for damages suffered by any firm, person, association, or corporation, by reason of the violation of the applicant of any of the terms and provisions of this code or any condition of the dealer’s or remanufacturer’s bond. The applicant shall stipulate and agree in the appointment that any process directed to the applicant, when personal service of process upon the applicant cannot be made in this state after due diligence and, in that case, is served upon the director or, in the event of the director’s absence from the office, upon any employee in charge of the office of the director, shall be of the same legal force and effect as if served upon the applicant personally. The applicant shall further stipulate and agree, in writing, that the agency created by the appointment shall continue for and during the period covered by any license that may be issued and so long thereafter as the applicant may be made to answer in damages for a violation of this code or any condition of the bond. The instrument appointing the director as the agent for the applicant for service of process shall be acknowledged by the applicant before a notary public. In any case where the licensee is served with process by service upon the director, one copy of the summons and complaint shall be left with the director or in the director’s office in Sacramento or mailed to the office of the director in Sacramento. A fee of five dollars ($5) shall also be paid to the director at the time of service of the copy of the summons and complaint. Service on the director shall be a sufficient service on the licensee if a notice of service and a copy of the summons and complaint are immediately sent by registered mail by the plaintiff or the plaintiff’s attorney to the licensee. A copy of the summons and complaint shall also be mailed by the plaintiff or the plaintiff’s attorney to the surety on the applicant’s bond at the address of the surety given in the bond, postpaid and registered with request for return receipt. The director shall keep a record of all process so served upon the director, which record shall show the day and hour of service and shall retain the summons and complaint so served on file. Where the licensee is served with process by service upon the director, the licensee shall have and be allowed 30 days from and after the service within which to answer any complaint or other pleading which may be filed in the cause. However, for purposes of venue, where the licensee is served with process by service upon the director, the service is deemed to have been made upon the licensee in the county in which the licensee has or last had an established place of business.

history: (History: Amended by Stats. 2004, Ch. 836, Sec. 10. Effective January 1, 2005.)


text: Notwithstanding subdivision (b) of Section 11710, the bond amount of a dealer who sells vehicles on a wholesale basis only, and who sells fewer than 25 vehicles per year, shall be ten thousand dollars ($10,000).

history: (History: Added by Stats. 2002, Ch. 1110, Sec. 1. Effective January 1, 2003.)


text:
If a deposit is given instead of the bond required by Section 11710 both of the following apply:

(a) (1) The director may order the deposit returned at the expiration of any of the following dates:

(A) Three years from the date an applicant for a dealer’s license who has operated a business of selling vehicles under a temporary permit has ceased to do business.

(B) Three years from the date a licensee has ceased to be licensed, if the director is satisfied that there are no outstanding claims against the deposit.

(C) Five years from the date a licensee secured and maintained a dealer bond, pursuant to Section 11710, after posting a deposit, if the director is satisfied that there are no outstanding claims against the deposit.

(2) A judge of a superior court may order the return of the deposit prior to the expiration of the dates provided in paragraph (1) upon evidence satisfactory to the judge that there are no outstanding claims against the deposit.

(b) If either the director, department, or state is a defendant in any action instituted to recover all or any part of the deposit, or any action is instituted by the director, department, or state to determine those entitled to any part of the deposit, the director, department, or state shall be paid reasonable attorney fees and costs from the deposit. Costs shall include those administrative costs incurred in processing claims against the deposit.

history: (History: Amended by Stats. 2010, Ch. 483, Sec. 2. (SB 1004) Effective January 1, 2011.)


text:
(a) If any person (1) shall suffer any loss or damage by reason of any fraud practiced on him or fraudulent representation made to him by a licensed dealer or one of such dealer’s salesmen acting for the dealer, in his behalf, or within the scope of the employment of such salesman and such person has possession of a written instrument furnished by the licensee, containing stipulated provisions and guarantees which the person believes have been violated by the licensee, or (2) if any person shall suffer any loss or damage by reason of the violation by such dealer or salesman of any of the provisions of Division 3 (commencing with Section 4000) of this code, or (3) if any person is not paid for a vehicle sold to and purchased by a licensee, then any such person shall have a right of action against such dealer, his salesman, and the surety upon the dealer’s bond, in an amount not to exceed the value of the vehicle purchased from or sold to the dealer.

(b) If the state or any political subdivision thereof shall suffer any loss or damage by reason of any fraud practiced on the state or fraudulent representation made to the state by a licensed dealer, or one of such dealer’s representatives acting for the dealer, in his behalf, or within the scope of employment of such representatives, or shall suffer any loss or damage by reason of the violation of such dealer or representative of any of the provisions of Division 3 (commencing with Section 4000) of this code, or Part 5 (commencing with Section 10701), Division 2 of the Revenue and Taxation Code, the state or any political subdivision thereof, through the department, shall have a right of action against such dealer, his representative, and the surety upon the dealer’s bond in an amount not to exceed the value of the vehicles involved.

(c) The failure of a dealer upon demand to pay the fees and penalties determined to be due as provided in Section 4456 hereof is declared to be a violation of Division 3 (commencing with Section 4000) of this code, and Part 5 (commencing with Section 10701), Division 2 of the Revenue and Taxation Code and to constitute loss or damage to the state in the amounts of such fees and penalties determined to be due and not paid.

(d) The claims of the state under subdivision (b) shall be satisfied first and entitled to preference over all claims under subdivision (a).

(e) The claims of any person under subdivision (a) who is not a licensee shall be satisfied first and entitled to preference over all other claims under subdivision (a).

history: (History: Amended by Stats. 1972, Ch. 1106.)


text: A person acting as a dealer, who was not licensed as a dealer as required by this article, or a person acting as a lessor-retailer, who was not licensed as a lessor-retailer as required by Chapter 3.5 (commencing with Section 11600), may not enforce any security interest or bring or maintain any action in law or equity to recover any money or property or obtain other relief from the purchaser or lessee of a vehicle in connection with a transaction in which the person was, at the time of the transaction, required to be licensed as a dealer or a lessor-retailer.

history: (History: Amended by Stats. 2003, Ch. 62, Sec. 304. Effective January 1, 2004.)


text:
(a) The department shall not issue a dealer’s license to any applicant therefor who has not an established place of business as defined in this code. Should the dealer change the site or location of his established place of business, he or she shall, immediately upon making that change, so notify the department. Should a dealer for any reason whatsoever, cease to be in possession of an established place of business from and on which he or she conducts the business for which he or she is licensed, he or she shall immediately notify the department and, upon demand by the department, shall deliver to the department the dealer’s license, dealer’s special plate or plates, and all report of sale books in his or her possession.

(b) Should the dealer change to, or add another franchise for the sale of new vehicles, or cancel or, for any cause whatever, otherwise lose a franchise for the sale of new vehicles, he or she shall immediately so notify the department.

(c) Any person licensed under this article who has closed his or her established place of business may be served with process issued pursuant to Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code by registered mail at that place of business or at the mailing address of record if different from the established place of business, unless the person has notified the department in writing of another address where service may be made.

history: (History: Amended by Stats. 1988, Ch. 751, Sec. 7.)