CALIFORNIA DEALER TEST QUESTIONS AND ANSWERS 2025
To obtain a dealer license, you must obtain a surety bond for what amount? - (ANSWER)$50,000 or
$10,000
Which type of dealer is permitted to have a $10,000.00 bond? - (ANSWER)Wholesale dealer selling less
than 25 vehicles per year
An occupational license is valid for how long? - (ANSWER)2 years
A dealer's office must have all of the following except - (ANSWER)It must be located in the county where
the buyer lives
Which of the following are required for dealership signs? - (ANSWER)Each retail dealership must have a
sign not less than 2 feet square that can be read from 50 feet awaY
All dealers must have a display area except: - (ANSWER)Wholesale dealers
The dealership display area must: - (ANSWER)Be for the exclusive use of the dealer for display purposes
only
When is a branch license required? - (ANSWER)When vehicles are displayed and sold more than 1000
feet from the
main dealership office✅
Auto Brokers must do which of the following: - (ANSWER)Write all brokered sales into the dealer's auto
broker log
Auto brokers must also do which of the following - (ANSWER)Limit deposits to 2.5% of the purchase
price, and put all deposits in a separate trust account
If a dealer sells a vehicle on consignment, the dealer must do which of the
, CALIFORNIA DEALER TEST QUESTIONS AND ANSWERS 2025
following: - (ANSWER)Provide the consignor (the selling owner) a written accounting within 20 days of
the sale date showing where the money went
Which of the following are permitted methods for computing interest rates? - (ANSWER)a. The Pre-
Computed Basis Method
b. The Simple Interest Basis Method
c. Both a and b✅
A dealer can charge which of the following document preparation fees? - (ANSWER)$85.00 if the dealer
uses a Business Partner Automation registration
service
c. $70.00 if the dealer uses Fairfax Imaging to process their
registration documents
d. Both b and c✅
If the buyer defaults on a Conditional Sales Contract (stops making the
payments), the dealer may, with proper notification to the buyer: - (ANSWER)a. Accelerate amount due
b. Repossess vehicle
c. Sell vehicle
d. All of the above✅
If the dealer is a Buy Here Pay Here dealer (financing their own vehicles), the
dealer must: - (ANSWER)Put a decal on the vehicle stating the reasonable market value of the
vehicle✅
Is it ever permissible for a dealer to use GPS to track a vehicle? - (ANSWER)Yes, upon proper notice to
the buyer, including in the contract and a 10
day notice✅
To obtain a dealer license, you must obtain a surety bond for what amount? - (ANSWER)$50,000 or
$10,000
Which type of dealer is permitted to have a $10,000.00 bond? - (ANSWER)Wholesale dealer selling less
than 25 vehicles per year
An occupational license is valid for how long? - (ANSWER)2 years
A dealer's office must have all of the following except - (ANSWER)It must be located in the county where
the buyer lives
Which of the following are required for dealership signs? - (ANSWER)Each retail dealership must have a
sign not less than 2 feet square that can be read from 50 feet awaY
All dealers must have a display area except: - (ANSWER)Wholesale dealers
The dealership display area must: - (ANSWER)Be for the exclusive use of the dealer for display purposes
only
When is a branch license required? - (ANSWER)When vehicles are displayed and sold more than 1000
feet from the
main dealership office✅
Auto Brokers must do which of the following: - (ANSWER)Write all brokered sales into the dealer's auto
broker log
Auto brokers must also do which of the following - (ANSWER)Limit deposits to 2.5% of the purchase
price, and put all deposits in a separate trust account
If a dealer sells a vehicle on consignment, the dealer must do which of the
, CALIFORNIA DEALER TEST QUESTIONS AND ANSWERS 2025
following: - (ANSWER)Provide the consignor (the selling owner) a written accounting within 20 days of
the sale date showing where the money went
Which of the following are permitted methods for computing interest rates? - (ANSWER)a. The Pre-
Computed Basis Method
b. The Simple Interest Basis Method
c. Both a and b✅
A dealer can charge which of the following document preparation fees? - (ANSWER)$85.00 if the dealer
uses a Business Partner Automation registration
service
c. $70.00 if the dealer uses Fairfax Imaging to process their
registration documents
d. Both b and c✅
If the buyer defaults on a Conditional Sales Contract (stops making the
payments), the dealer may, with proper notification to the buyer: - (ANSWER)a. Accelerate amount due
b. Repossess vehicle
c. Sell vehicle
d. All of the above✅
If the dealer is a Buy Here Pay Here dealer (financing their own vehicles), the
dealer must: - (ANSWER)Put a decal on the vehicle stating the reasonable market value of the
vehicle✅
Is it ever permissible for a dealer to use GPS to track a vehicle? - (ANSWER)Yes, upon proper notice to
the buyer, including in the contract and a 10
day notice✅
