pg. 1
DMV AUTO DEALERS LICENSE EXAM NEWEST 2025
ACTUAL EXAM| COMPLETE ACCURATE QUESTIONS
AND VERIFIED ANSWERS (100% CORRECT ANSWERS)
ALREADY GRADED A+
Which of the following are not taxable in a vehicle sales transaction? - ANSWER - *
FINANCE CHARGES
* INSURANCE CHARGES
* SMOG CERTIFICATE FEE (PAID TO STATE)
Dealers must securely store their Reports of Sale at their principal place of business for
- ANSWER - and are required to "implement federal safeguard standards for storage"
and maintain the records vehicle transaction for 90 days (was 18 months) at the principal place of business or branch location.
After 3 months (90 days), use an offsite storage facility within the state or third-party vendor to maintain records for a total storage requirement of 36 months / 3 years.
- Digital storage is acceptable after the initial 90 days
- DMV requested records must be provided within 3 business days
California's "Car Buyer Bill of Rights" (AB 68) limits a Dealer's compensation from an institution financing the purchase of a vehicle is limited to no more than: - ANSWER - - 2.5% for terms up to 60 months
- 2.0% for terms of 60 months or longer
This limitation does not apply when the assignment requires the Dealer to bear the entire risk of financial performance for the consumer or when the assignment is more than six months after the date of the Conditional Sale Contract. 1 / 3
pg. 2
When a Dealer sells a Lemon Law buyback vehicle, they must notify the buyer on letter-
size paper of the following: - ANSWER - - The year, make, model, and vehicle
identification number
- That the vehicle title is marked "Lemon Law Buyback"
- The nature of each nonconformity reported by the vehicle's original buyer or lessee
- Any repairs made to the vehicle in an attempt to correct each nonconformity
Dealers should complete and submit the following to renew their license: - ANSWER - - Renewal Application (DMV form OL 45)
- Proof of Continuing Education (every two years)
- Proof of Surety Bond
- Payment of Renewal Fees
Who may operate a vehicle with special plates for any purpose? - ANSWER - (a) A sole owner, a general partner, a manager of a limited liability company, or a corporate officer or director of a Dealer provided that individual is actively engaged in the management and control of the Dealer's business operations (b) A general manager, or business manager, or sales manager who is actively engaged in the management and control of the business operations of the Dealer when no other individual meets the criteria in (a) above (c) A driver -if- an individual identified in section (b) is also in the vehicle.(d) An unaccompanied adult who regularly resides in the household of individuals identified in section (b) to pick up or drop off that individual.
A Conditional Sales Contract must include all of the following (for cars under $40k) - ANSWER - - A Contract Cancellation Option* with a "2-day cooling-off period"
- All costs and terms of payment
- Written Disclosure(s) for any aftermarket add-on items
- All financial aspects of the sale
- Signatures of both the Buyer and the Seller
- / 3
pg. 3 True/False You must disclose any vehicle modifications which alter the vehicle from the vehicle manufacturer's original specification. - ANSWER - True Examples of this would include suspension, oversized tires & wheel or exhaust systems.
Additional individuals may operate a vehicle with special plates: - ANSWER - (a) Employees of a Dealer when they are acting within the course and scope of their employment (b) Drivers for special event purposes, if they carry a letter of authorization from the Dealer (c) A prospective buyer or lessee, to test drive a vehicle, up to seven days.(d) Employees of Dealer, who must operate a commercial vehicle in the course of their employment, taking a commercial test drive
True/False Dealers must convert all interest rates to standard APR (Annual Percentage Rate). - ANSWER - True The Annual Percentage Rate (APR) is the annual rate charged for the Buyer's loan, shown as a percentage that represents the actual yearly cost of borrowing over the term of a loan.
What is a Dealer required to do when selling a vehicle with a 5 digit odometer that has passed 99,999 miles? - ANSWER - The Dealer must check the "Mileage EXCEEDS the mechanical limits" box on the REG 262
California's Vehicle Code requires that you do not sell or offer for sale, a vehicle unless all of its safety equipment is in proper working condition.It does not matter if you tell the Buyer about the safety defects - this requirement cannot be waived by a Dealer or Buyer.The Code does not apply when the Vehicle: - ANSWER - - Is sold to another Dealer
- Is being legally wrecked, dismantled
- Used exclusively off-highway
- Is a leased, registered in California and sold to the person leasing it (if they were in
- / 3
possession of the vehicle immediately prior to the sale)