4.1 Location Requirements

Under Vehicle Code Section 11704, every dealer must maintain an “established place of business.” This is not a suggestion — it’s a core licensing requirement. Your established place of business is where you conduct your primary dealer activities: buying vehicles, selling vehicles, maintaining records, and interacting with customers and DMV investigators. Let’s break down exactly what that means.

First, the physical structure. Your dealership must be in a permanent building. Not a tent. Not a trailer — unless that trailer is permanently affixed to a foundation. Not a storage container with a desk in it. A permanent, enclosed building that is suitable for conducting business. It must have a desk, a chair, a telephone, internet access, and file storage for your records. These might seem like obvious requirements, but DMV cites dealers for failing to meet them more often than you’d think.

Second, signage. Under Vehicle Code Section 11709, your dealership must display a sign with your business name — the name on your dealer license — that is at least two square feet in area and readable from a distance of 50 feet. The sign must be permanently displayed at your established place of business, visible from the public right-of-way. Think about what “readable from 50 feet” means in practice — the letters need to be large enough that someone standing across the street or across a parking lot can read your dealership name. A small decal on your office door doesn’t meet this requirement.

There is one exception to the signage requirement: wholesale-only dealers are exempt from the signage requirement under Section 11709(a). This makes sense because wholesale dealers sell only to other licensed dealers and don’t serve the walk-in public. However, wholesale-only dealers must still meet all other location requirements.

Your location must be properly zoned for your dealership activities. Before you sign a lease or purchase a property, verify with the local city or county planning department that vehicle dealer operations are permitted at that location. Zoning violations can result in DMV refusing to issue or renew your license, even if you meet every other requirement. Different jurisdictions have different zoning rules — some areas may allow vehicle sales in commercial zones but not in light industrial zones, or vice versa.

Your lease or ownership documents must also be in order. DMV requires proof that you have a legal right to occupy the property. If you’re leasing, your lease must explicitly permit vehicle dealer activities — a lease that says the space is for “general office use” may not be sufficient. Get a lease that specifically identifies your business as a vehicle dealership and authorizes vehicle display, storage, and sales activities.

Your facility must also have adequate space for vehicle display if you’re a retail dealer. Vehicles must be displayed on the dealership premises — not on the public street, not in a vacant lot next door that you don’t lease, not in a church parking lot you use on weekdays. The display area must be part of your established place of business, and it must be identified in your dealer license application.

You’re also required to post your business hours, as we discussed in Section 1. Your posted hours must be visible when the business is closed so the public — and DMV investigators — can see when you’re supposed to be open. If you change your hours, update the posting immediately.