9.6 Dealer Plates/”Special Plates” (use of)

Dealer plates — also called “special plates” — are license plates issued to licensed dealers under Vehicle Code Sections 11714 and 11715. These plates serve specific purposes and their use is strictly regulated. Dealer plates are not personal license plates. You cannot use them to avoid registering your personal vehicle. They are business tools with defined, authorized uses.

Authorized uses of dealer plates include: displaying the plate on vehicles in your inventory for the purpose of test drives, moving vehicles between your lot and a repair facility, transporting vehicles from auction to your lot, and demonstrating vehicles to prospective buyers. The vehicle must be part of your dealer inventory to carry a dealer plate — you cannot put a dealer plate on a vehicle you’ve already sold but haven’t yet registered.

Dealer plates must be displayed on the vehicle whenever the vehicle is operated on public roads under the authority of the dealer plate. The plate must be mounted in the rear license plate position — not stuck in the window, not lying on the dashboard, not held in place by the trunk lid.

Under California law, the rules regarding employees, spouses, and family members driving a vehicle with dealer plates are incredibly strict. The California Department of Motor Vehicles (DMV) heavily penalizes “personal use” to ensure these plates are not treated as permanent tax loopholes. [1, 2, 3]

Here is exactly how the law applies to everyone outside of the primary dealership owner:

1. Rules for Dealership Employees

Dealership employees are heavily restricted in how and when they can operate an inventory vehicle using a dealer plate. [1]

• Course and Scope of Employment: According to California Code of Regulations Title 13, Section 201.00(d), a licensed driver who is an employee may operate a vehicle with dealer plates only when acting within the course and scope of their employment.
• Business Purposes Only: Valid employee uses include moving a vehicle between lots, driving it to a repair facility, transport from auction, or doing a vehicle trade.
• Personal Errands are Illegal: An employee cannot take a vehicle with dealer plates to run personal errands, go grocery shopping, or take a weekend trip.
• The “Demo” Vehicle Exception for Managers: Dealership managers or executives are sometimes issued a “demo” car from inventory. If a manager uses a demo vehicle for personal commuting, it triggers massive state sales tax and income tax formulas to calculate a “use fee”. DMV investigators actively look for dealer-plated vehicles containing personal items (like sports gear or child seats) to trigger dealership tax audits. [1, 2, 3, 4, 5, 6]

2. Rules for Spouses and Household Family Members

Unrestricted personal use of a dealer plate does not extend to the dealer’s spouse or children. [1, 2]

• The “Chauffeur” Drop-Off Exception: Under 13 CCR § 201.00(c)(1), an unaccompanied spouse or immediate household family member may only drive a car with dealer plates for the strict purpose of picking up or dropping off the dealership owner.
• The “Passenger” Exception: A spouse can drive or ride in the vehicle for any purpose, but only if the dealership owner is physically inside the vehicle with them.
• Independent Driving is Prohibited: A spouse cannot independently take an inventory car with a dealer plate out to lunch, to work, or on a personal vacation. Doing so is a direct violation of California Vehicle Code rules. [, 2, 3, 4]

Summary Checklist of Illegal Uses

A dealership faces fines, plate confiscation, or license revocation if plates are found being used on: [1, 2, 3]

• ❌ Work or service vehicles (such as parts delivery trucks or lot tow trucks).
• ❌ Service loaner cars given to customers while their personal cars are fixed.
• ❌ Vehicles loaned out to friends, extended family, or non-employees.