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30+ Years of  Expert Retail Dealer Operations and Manufacturer Experience - Approved Course

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DMV – New Dealer Occupational License Course (CA) 6 Hour Course

Curriculum

  • 11 Sections
  • 106 Lessons
  • 12 Weeks
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  • Section 1: Welcome and Table of Contents & Recent Occupational Licensing Rule Changes and Reminders
    11
    • 1.1
      Welcome
    • 1.2
      1.1 DMV Online Occupational Licensing Portals
    • 1.3
      1.2 Electronic Records
    • 1.4
      1.3 Business Hours / By Appointment Only
    • 1.5
      1.4 Privacy Disclosure Rules
    • 1.6
      1.5 Sales Tax Due to DMV at Time of Transfer
    • 1.7
      1.6 Temporary License Plates (TLP) Attachment Problems and Solutions
    • 1.8
      1.7 Assembly Bill 516 – Online ROS
    • 1.9
      1.8 AB 1274: Smog Exemption Extended to 8 Model Years
    • 1.10
      1.9 Reminders – Changes 2018 and Older
    • 1.11
      Section 1 Quiz
      4 Questions
  • Section 2: Car Buyer's Bill of Rights
    6
    • 2.1
      2.1 The Car Buyer’s Bill of Rights (AB 68)
    • 2.2
      2.2 Vehicle Condition Forms
    • 2.3
      2.3 “Certified” Used Vehicle Advertising Rule under the Car Buyer’s Bill of Rights
    • 2.4
      2.4 Finance Charge Limits between 2% and 2.5%
    • 2.5
      2.5 Bill of Rights Kit
    • 2.6
      Section 2 Quiz: Car Buyer’s Bill of Rights
      6 Questions
  • Section 3: Dealer Bonds, Title and Registration Procedures
    14
    • 3.1
      3.1 $50,000 Dealer Bond
    • 3.2
      3.2 Exceptions: $10,000 Bond
    • 3.3
      3.3 Bond Company Recommendations
    • 3.4
      3.5 E-Mail Alert System
    • 3.5
      3.7 Completing Titles for Transfer
    • 3.6
      3.8 Other Transfer Requirements
    • 3.7
      3.9 Power of Attorney
    • 3.8
      3.10 Registration Fees
    • 3.9
      3.11 Out-of-State Deliveries
    • 3.10
      3.12 Out of Country Sales
    • 3.11
      3.13 Administrative Service Fees (“ASF”)
    • 3.12
      3.14 Reports of Sale
    • 3.13
      3.15 Other DMV Registration and Miscellaneous Forms
    • 3.14
      📂 SECTION 3 Quiz : Dealer Bonds, Title and Registration Procedures
      5 Questions
  • Section 4: Main & Branch Location Requirements, Off-site Displays, Temporary Branches
    5
    • 4.1
      4.1 Location Requirements
    • 4.2
      4.2 Branch Locations
    • 4.3
      4.3 Off-Site Vehicle Displays
    • 4.4
      4.4 Temporary Branch Locations
    • 4.5
      Section 4 Quiz: Main & Branch Location Requirements, Off-site Displays, Temporary Branches
      2 Questions
  • Section 5: Auto Brokers
    8
    • 5.1
      5.1 Auto Broker’s: Endorsement, Log, Agreement
    • 5.2
      5.2 Deposits and Refunds
    • 5.3
      5.3 Trust Account
    • 5.4
      5.4 Brokering Agreement and Fee; Licensed Retail Dealers Only
    • 5.5
      5.5 Advertising INSTRUCTOR SCRIPT: Autobrokers must comply with specific advertising rules. When advertising your brokering services, you must clearly identify yourself as a broker. You cannot advertise in a way that makes consumers believe you are selling vehicles from your own inventory when you’re actually brokering vehicles from other dealers’ inventories. Transparency is the key principle. You cannot advertise a specific vehicle at a specific price unless you have a written agreement with a selling dealer to provide that vehicle at that price. Advertising a vehicle you don’t have and can’t guarantee is misleading. If a customer responds to your ad, comes to your dealership, and you can’t deliver the advertised vehicle at the advertised price, you’ve engaged in deceptive advertising — and potentially bait-and-switch tactics, which we’ll cover in Section 9. All advertising by autobrokers must include your dealer license number and disclose that you are a broker. This applies to all advertising channels — newspaper, online, radio, television, social media, third-party listing sites. If you run an ad that says “2024 Toyota Camry — $28,000” without disclosing that you’re a broker and that the vehicle is at another dealer’s location, that’s a problem.
    • 5.6
      5.6 Consignment
    • 5.7
      5.7 Conditional Sales Contract; Requirements
    • 5.8
      Section 5 Quiz: Auto Brokers
      5 Questions
  • Section 6: Motor Vehicle Financing & Sales and Use Tax
    11
    • 6.1
      6.1 Terms of Financing
    • 6.2
      6.2 Computing Interest Rates
    • 6.3
      6.3 A.P.R.
    • 6.4
      6.4 Computing Monthly Payments
    • 6.5
      6.5 Truth in Lending
    • 6.6
      6.6 Contract Not Executed
    • 6.7
      6.7 Breach of Conditional Sales Contract
    • 6.8
      6.8 Repossession
    • 6.9
      6.9 Foreign Language Contracts
    • 6.10
      6.10 Sales and Use Tax
    • 6.11
      Section 6 Quiz
      5 Questions
  • Section 7: History Disclosure, Odometers & Safety Equipment Vehicle
    12
    • 7.1
      7.1 Condition of Vehicle: Known Damage, Re-manufactured INSTRUCTOR SCRIPT: As a dealer, you have an affirmative obligation to disclose known material facts about the condition of every vehicle you sell. This isn’t just about being honest — though it is that too — it’s a legal requirement. If you know a vehicle has been in a significant accident, has frame damage, has flood damage, has been re-manufactured, or has any other material condition that would affect a reasonable buyer’s decision to purchase, you must disclose it. The key word is “known.” You must disclose what you know. Now, the question becomes: what are you expected to know? As a professional dealer, you are held to a higher standard than a private party seller. You’re expected to conduct reasonable inspections of the vehicles you sell. If a vehicle shows obvious signs of prior damage — mismatched paint, uneven panel gaps, welding marks on structural components — and you didn’t notice because you never looked, a court may find that you “should have known” and treat it the same as actual knowledge. Re-manufactured vehicles — sometimes called rebuilt or reconstructed vehicles — carry specific disclosure obligations. If a vehicle’s title is branded as salvage, rebuilt, or re-manufactured, that brand must be disclosed to the buyer in writing. Simply hoping the buyer notices the brand on the title isn’t sufficient. You must affirmatively disclose it. The disclosure should be on a separate form that the buyer signs, acknowledging that they’ve been informed of the vehicle’s title status. 💡 Real-World Example A dealer purchases a vehicle at auction that looks clean — nice paint, good interior, runs well. The dealer doesn’t run a vehicle history report. The dealer sells it to a customer, who later discovers the vehicle was declared a total loss after a flood in another state. The title was “washed” — the salvage brand was removed when the vehicle was re-titled in a state with less rigorous title branding laws. The customer sues the dealer for failure to disclose. Even though the dealer didn’t know about the flood damage, the court may find the dealer was negligent for failing to run a basic vehicle history check — something a reasonably prudent dealer would do.
    • 7.2
      7.2 Vehicle History Disclosure
    • 7.3
      7.3 Odometers
    • 7.4
      7.4 Duty to Record Mileage
    • 7.5
      7.5 Unlawful Actions
    • 7.6
      7.6 Repossessed Vehicle Odometer Disclosure
    • 7.7
      7.7 Signatures
    • 7.8
      7.8 REG 262 Form (Vehicle/Vessel Transfer Form)
    • 7.9
      7.9 Division 12 Safety Equipment
    • 7.10
      7.10 Leased Vehicles / Wholesale between Dealers
    • 7.11
      7.11 Safety Equipment List
    • 7.12
      Section 7: Quiz
      3 Questions
  • SECTION 8: Smog Rules and Advertising
    11
    • 8.1
      8.1 Smog Requirements and Exceptions
    • 8.2
      8.2 Smog Certificate Duration
    • 8.3
      8.3 Smog Fee
    • 8.4
      8.4 Bureau of Automotive Repair (“BAR”)
    • 8.5
      8.5 Advertising; Definition, Misprints, Rules
    • 8.6
      8.6 Document Preparation Fee
    • 8.7
      8.7 Time Limits
    • 8.8
      8.8 Use of Terms
    • 8.9
      8.9 Cash vs. Credit
    • 8.10
      8.10 Buyers Guide & Foriegn Language Contracts
    • 8.11
      Section 8 Quiz
      5 Questions
  • SECTION 9: Warranties, Dealer Plates and Unlawful Acts
    17
    • 9.1
      9.1 Warranties; “Lemon Law”, 18 months/18,000 miles
    • 9.2
      9.2 Disclosure Statements
    • 9.3
      9.3 Warranty Returns
    • 9.4
      9.4 Implied Warranty of; Merchantability, Fitness
    • 9.5
      9.5 Express Warranty
    • 9.6
      9.6 Dealer Plates/”Special Plates” (use of)
    • 9.7
      9.8 Vehicle Delivery
    • 9.8
      9.7 Trailers
    • 9.9
      9.9 Misuse of Plates; Illegal Uses
    • 9.10
      9.10 Duration/Expiration/Penalty/Display
    • 9.11
      9.11 Lost Plates or Stickers
    • 9.12
      9.12 Tow Dollies
    • 9.13
      9.13 Unlawful Dealer Activities
    • 9.14
      9.14 “Bait and Switch”, “Bird Dog Fees”
    • 9.15
      9.15 Fraud
    • 9.16
      9.16 DMV Enforcement Actions
    • 9.17
      Section 9 Quiz
      4 Questions
  • SECTION 10: Avoid Buying a Stolen Vehicle and Helpful Tips and Advice
    20
    • 10.1
      10.1 Stolen Vehicles & Helpful Tips and Advice
    • 10.2
      10.2 Frequently Asked Questions
    • 10.3
      10.3 Corrections on Report of Sale Forms (REG 51)
    • 10.4
      10.4 “Unwind”, Void/Canceled Used Vehicle Report of Sale
    • 10.5
      10.5 Used Vehicle Rollbacks
    • 10.6
      10.6 Electronic Lien and Title (“ELT”)
    • 10.7
      10.7 Customer Demands Title
    • 10.8
      10.8 Multiple Transfers
    • 10.9
      10.9 Duplicate Title Application
    • 10.10
      10.10 Transfer of California Registration Only (Goldenrod Registration)
    • 10.11
      10.11 Transfer Only
    • 10.12
      10.12 Bonded Transfers
    • 10.13
      10.13 Non Resident Vehicle Transfers
    • 10.14
      10.14 Vehicles with Unavailable Records
    • 10.15
      10.15 Waiver of Fees and/or Penalties
    • 10.16
      10.16 Title Errors and Corrections
    • 10.17
      10.17 Temporary Operating Permit
    • 10.18
      10.18 Transporter Permit
    • 10.19
      10.19 DMV Forms
    • 10.20
      SECTION 10: Avoid Buying a Stolen Vehicle & Helpful Tips
      6 Questions
  • Wrap Up
    1
    • 11.1
      Wrap Up

9.1 Warranties; “Lemon Law”, 18 months/18,000 miles

California’s lemon law is one of the strongest consumer protection laws in the country, and you need to understand exactly how it works — especially the distinction between new and used vehicle protections, because this is an area where there is widespread confusion.

The Song-Beverly Consumer Warranty Act is California’s lemon law. For new vehicles, the key provision is Civil Code Section 1793.22, which creates a “presumption” that a vehicle is a lemon if, within the first 18 months or 18,000 miles (whichever comes first), the manufacturer or its authorized dealer has been unable to repair a substantial defect after a reasonable number of repair attempts. That 18 months/18,000 miles figure is the presumption period — it’s a timeframe within which the law presumes the vehicle is defective if the conditions are met. The presumption makes it easier for the consumer to prevail in a lemon law claim.

Now, for used vehicles, the rules are different. The used vehicle implied warranty is governed by Civil Code Section 1795.5. Under this section, when a dealer sells a used vehicle with an express warranty, an implied warranty of merchantability is also provided. The duration of that implied warranty is coextensive with the express warranty — meaning it lasts as long as the express warranty — but it has a floor of 30 days and a ceiling of 3 months. So if you sell a used vehicle with a 60-day express warranty, the implied warranty also lasts 60 days. If you sell with a 15-day warranty, the implied warranty still lasts 30 days (the minimum). If you sell with a 6-month warranty, the implied warranty lasts 3 months (the maximum).

Here’s where the confusion arises: some people believe the 18 months/18,000 miles lemon law presumption applies to used vehicles. It does not. That presumption is specifically for new motor vehicles under Section 1793.22. Used vehicles have their own, separate protections under Section 1795.5, with the 30-day to 3-month implied warranty duration.

 

⚠ Key Compliance Point

Warranty Distinctions — New vs. Used:

•  NEW vehicles: Song-Beverly lemon law presumption — 18 months/18,000 miles (CC §1793.22)

•  USED vehicles: Implied warranty under CC §1795.5 — coextensive with express warranty, minimum 30 days, maximum 3 months

The 18 months/18,000 miles figure does NOT apply to used vehicles.

 

One more important development you need to know about: the California Supreme Court’s ruling in Rodriguez v. FCA US, LLC, decided on October 31, 2024. In this case, the court addressed whether a used vehicle that is sold with only the remaining balance of the original manufacturer’s warranty qualifies as a “new motor vehicle” under the Song-Beverly Act. The court ruled that it does not. This means that a buyer who purchases a used vehicle from a dealer and has remaining factory warranty coverage cannot bring a lemon law claim under the new vehicle provisions. Their remedies are limited to the used vehicle protections under Section 1795.5. This ruling clarified an area of law that had been disputed among California’s appellate courts for years.

 

💡 Real-World Example

A customer buys a 2-year-old certified pre-owned vehicle from a dealer. The vehicle still has 12 months remaining on the original factory warranty. After experiencing persistent mechanical problems, the customer attempts to bring a lemon law claim under the Song-Beverly Act’s new vehicle provisions, arguing that the remaining factory warranty makes it a “new motor vehicle” under the Act. Under the Rodriguez v. FCA US, LLC ruling (2024), this claim will not succeed. The vehicle is used, and the customer’s implied warranty protection is limited to the terms under CC §1795.5 — not the 18-month/18,000-mile lemon law presumption for new vehicles.

 

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Disclaimer:  Dealer University (TM) provides educational materials and training resources for informational purposes only. We do not provide legal, financial, tax, or accounting advice. For specific legal or financial guidance regarding your dealership operations, please consult with a qualified professional.

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