CALIFORNIA DEALER TEST EXAM –QUESTIONS AND CORRECT ANSWERS (VERIFIED ANSWERS) PLUS RATIONALES 2026 Q&A |
INSTANT DOWNLOAD PDF.
*Core Domains*
*• Licensing Requirements*
*• Transfer of Title and Registration*
*• Sales and Use Tax Obligations*
*• Dealer Operating Standards*
*• Advertising Laws and Regulations*
*• Contract and Disclosure Requirements*
*• Export and Out-of-State Sales*
*• Enforcement and Disciplinary Actions*
*Introduction*
*The purpose of this comprehensive assessment is to evaluate a candidate's readiness for the California Vehicle Dealer Licensing Exam.
SECTION ONE: QUESTIONS 1–100
1. A dealer must submit the application for registration and the required fees to the DMV for a used vehicle sale within how many days?
A. 15 days
B. 20 days
C. 30 days
D. 45 days
🟢 Correct answer: C. 30 days
🔴 RATIONALE: California law requires that for the sale of a used vehicle, the dealer must submit the registration application and fees to the DMV
within 30 days of the date of sale to avoid penalties.
2. Which of the following is a mandatory requirement for a dealer's primary place of business?
A. A minimum of 5,000 square feet of lot space
B. An office and a display area situated on the same property
C. A service department with at least one certified mechanic
,D. A neon sign visible from the nearest highway
🟢 Correct answer: B. An office and a display area situated on the same property
🔴 RATIONALE: To maintain a dealer license, the place of business must include an office where records are kept and a display area of sufficient
size to permit the inspection of vehicles.
3. Under California law, "Document Processing Charges" are:
A. Mandatory fees that all customers must pay
B. Negotiable fees that can exceed $200
C. Optional fees that must be disclosed and are subject to a maximum cap
D. Illegal and cannot be charged by licensed dealers
🟢 Correct answer: C. Optional fees that must be disclosed and are subject to a maximum cap
🔴 RATIONALE: Document processing charges are not state-mandated; they are fees a dealer may charge for preparing paperwork. These fees
must be disclosed and are capped by law.
4. A dealer is advertising a specific vehicle for a price. How long is the dealer required to sell that vehicle at the advertised price?
A. Only on the day the advertisement is published
B. Until the advertisement is withdrawn or the vehicle is sold
C. For exactly 48 hours following the publication
D. Until the end of the calendar month
🟢 Correct answer: B. Until the advertisement is withdrawn or the vehicle is sold
🔴 RATIONALE: Dealers must sell a vehicle at the advertised price (plus tax, title, and license) as long as the advertisement remains active or until
the specific unit is sold.
5. When a vehicle is sold to be exported to another country, what must the dealer obtain to avoid charging California sales tax?
A. A verbal promise from the buyer
B. A copy of the buyer's foreign passport
C. A Bill of Lading or other documentation of delivery to a common carrier
D. A California driver's license from the buyer
🟢 Correct answer: C. A Bill of Lading or other documentation of delivery to a common carrier
🔴 RATIONALE: To qualify for a sales tax exemption on exports, the dealer must prove the vehicle was delivered to a foreign destination via a
common carrier or the dealer's own delivery vehicle.
6. A "Consignment" agreement between a dealer and an individual owner must include:
, A. A minimum 20% commission for the dealer
B. The owner's social security number
C. A specified period of time the agreement is in effect
D. A guarantee that the vehicle will sell within 10 days
🟢 Correct answer: C. A specified period of time the agreement is in effect
🔴 RATIONALE: Consignment agreements are strictly regulated and must include specific terms, including the duration of the agreement and the
agreed-upon price to be paid to the consignor.
7. What color is the "Notice to Federal Trade Commission (FTC) Buyer's Guide" that must be displayed on used vehicles?
A. Bright Red
B. White with Black text
C. Blue and Yellow
D. Green and White
🟢 Correct answer: B. White with Black text
🔴 RATIONALE: The FTC Buyer's Guide is a standard federal form, typically printed in black ink on white paper, and must be prominently displayed
on every used vehicle offered for sale.
8. If a dealer changes the location of their business, they must notify the DMV:
A. Within 30 days of the move
B. Immediately or in advance of the move
C. At the end of the fiscal year
D. Only if the move is more than 50 miles away
🟢 Correct answer: B. Immediately or in advance of the move
🔴 RATIONALE: A dealer license is location-specific. Any change in the business address requires immediate notification and an application for a
revised license before operating at the new site.
9. Which of the following must be included in a "Pre-check" for a vehicle to be sold as "Certified Used"?
A. An oil change and tire rotation
B. A complete detail and steam clean of the engine
C. A comprehensive inspection report signed by the dealer
D. A new set of floor mats
🟢 Correct answer: C. A comprehensive inspection report signed by the dealer
🔴 RATIONALE: California's Car Buyer's Bill of Rights requires that "Certified" used vehicles undergo a rigorous inspection, and a completed
inspection report must be provided to the buyer.
INSTANT DOWNLOAD PDF.
*Core Domains*
*• Licensing Requirements*
*• Transfer of Title and Registration*
*• Sales and Use Tax Obligations*
*• Dealer Operating Standards*
*• Advertising Laws and Regulations*
*• Contract and Disclosure Requirements*
*• Export and Out-of-State Sales*
*• Enforcement and Disciplinary Actions*
*Introduction*
*The purpose of this comprehensive assessment is to evaluate a candidate's readiness for the California Vehicle Dealer Licensing Exam.
SECTION ONE: QUESTIONS 1–100
1. A dealer must submit the application for registration and the required fees to the DMV for a used vehicle sale within how many days?
A. 15 days
B. 20 days
C. 30 days
D. 45 days
🟢 Correct answer: C. 30 days
🔴 RATIONALE: California law requires that for the sale of a used vehicle, the dealer must submit the registration application and fees to the DMV
within 30 days of the date of sale to avoid penalties.
2. Which of the following is a mandatory requirement for a dealer's primary place of business?
A. A minimum of 5,000 square feet of lot space
B. An office and a display area situated on the same property
C. A service department with at least one certified mechanic
,D. A neon sign visible from the nearest highway
🟢 Correct answer: B. An office and a display area situated on the same property
🔴 RATIONALE: To maintain a dealer license, the place of business must include an office where records are kept and a display area of sufficient
size to permit the inspection of vehicles.
3. Under California law, "Document Processing Charges" are:
A. Mandatory fees that all customers must pay
B. Negotiable fees that can exceed $200
C. Optional fees that must be disclosed and are subject to a maximum cap
D. Illegal and cannot be charged by licensed dealers
🟢 Correct answer: C. Optional fees that must be disclosed and are subject to a maximum cap
🔴 RATIONALE: Document processing charges are not state-mandated; they are fees a dealer may charge for preparing paperwork. These fees
must be disclosed and are capped by law.
4. A dealer is advertising a specific vehicle for a price. How long is the dealer required to sell that vehicle at the advertised price?
A. Only on the day the advertisement is published
B. Until the advertisement is withdrawn or the vehicle is sold
C. For exactly 48 hours following the publication
D. Until the end of the calendar month
🟢 Correct answer: B. Until the advertisement is withdrawn or the vehicle is sold
🔴 RATIONALE: Dealers must sell a vehicle at the advertised price (plus tax, title, and license) as long as the advertisement remains active or until
the specific unit is sold.
5. When a vehicle is sold to be exported to another country, what must the dealer obtain to avoid charging California sales tax?
A. A verbal promise from the buyer
B. A copy of the buyer's foreign passport
C. A Bill of Lading or other documentation of delivery to a common carrier
D. A California driver's license from the buyer
🟢 Correct answer: C. A Bill of Lading or other documentation of delivery to a common carrier
🔴 RATIONALE: To qualify for a sales tax exemption on exports, the dealer must prove the vehicle was delivered to a foreign destination via a
common carrier or the dealer's own delivery vehicle.
6. A "Consignment" agreement between a dealer and an individual owner must include:
, A. A minimum 20% commission for the dealer
B. The owner's social security number
C. A specified period of time the agreement is in effect
D. A guarantee that the vehicle will sell within 10 days
🟢 Correct answer: C. A specified period of time the agreement is in effect
🔴 RATIONALE: Consignment agreements are strictly regulated and must include specific terms, including the duration of the agreement and the
agreed-upon price to be paid to the consignor.
7. What color is the "Notice to Federal Trade Commission (FTC) Buyer's Guide" that must be displayed on used vehicles?
A. Bright Red
B. White with Black text
C. Blue and Yellow
D. Green and White
🟢 Correct answer: B. White with Black text
🔴 RATIONALE: The FTC Buyer's Guide is a standard federal form, typically printed in black ink on white paper, and must be prominently displayed
on every used vehicle offered for sale.
8. If a dealer changes the location of their business, they must notify the DMV:
A. Within 30 days of the move
B. Immediately or in advance of the move
C. At the end of the fiscal year
D. Only if the move is more than 50 miles away
🟢 Correct answer: B. Immediately or in advance of the move
🔴 RATIONALE: A dealer license is location-specific. Any change in the business address requires immediate notification and an application for a
revised license before operating at the new site.
9. Which of the following must be included in a "Pre-check" for a vehicle to be sold as "Certified Used"?
A. An oil change and tire rotation
B. A complete detail and steam clean of the engine
C. A comprehensive inspection report signed by the dealer
D. A new set of floor mats
🟢 Correct answer: C. A comprehensive inspection report signed by the dealer
🔴 RATIONALE: California's Car Buyer's Bill of Rights requires that "Certified" used vehicles undergo a rigorous inspection, and a completed
inspection report must be provided to the buyer.
