An autobroker is a person or entity that, for compensation, arranges or negotiates the purchase of a vehicle on behalf of a buyer from a selling dealer. The formal definition is in Vehicle Code Section 11700.2. Here’s the important distinction: an autobroker does not own the vehicle being sold. The broker acts as an intermediary — the customer hires the broker to find and negotiate the purchase of a vehicle, and the actual sale is between the customer and the selling dealer. The broker facilitates the transaction and earns a fee for the service.
To operate as an autobroker in California, you must hold an autobroker endorsement on your dealer license. Under Vehicle Code Section 11700.3, only licensed retail dealers may obtain this endorsement. Let me repeat that because it’s critical: you must first be a licensed California retail dealer before you can add the autobroker endorsement. A wholesale-only dealer cannot broker. An unlicensed individual cannot broker. A business entity without a retail dealer license cannot broker. The endorsement is detailed further in Vehicle Code Section 11735.
Once you have the endorsement, you must maintain a brokering log. This log is a record of every brokering transaction you conduct and must include the customer’s name and contact information, the date the brokering agreement was signed, the vehicle being sought (or the vehicle ultimately purchased), the selling dealer’s information, the brokering fee charged, and the outcome of the transaction. This log must be available for DMV inspection at all times.
Before you begin brokering a vehicle for a customer, you must have a written brokering agreement signed by both parties. The agreement must clearly state the broker’s fee, the terms of the arrangement, and the customer’s rights — including the right to a refund of any deposit under certain circumstances. The brokering agreement is a contract between you and the customer, and it must comply with all applicable provisions of the Vehicle Code.
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⚠ Key Compliance Point Autobroker Requirements: • Definition: VEH §11700.2 — arranges vehicle purchase on behalf of buyer for compensation • Endorsement: VEH §11700.3 — only licensed retail dealers may obtain the autobroker endorsement • Endorsement details: VEH §11735 • Must maintain a brokering log of all transactions • Must have written brokering agreement before beginning each transaction |