Preliminary Education

Operating a successful dealership requires time, money, energy, and knowledge. But a person is not required to have all four of these elements to qualify for a dealer license. That said, the Department of Motor Vehicles will not issue a dealer license until an applicant demonstrates a basic understanding of the vehicle dealer industry in California.  

Each applicant must complete a six-hour preliminary education program with an approved education provider. The program must cover the automobile sales finance act, truth in lending act, sales and use taxes, vehicle equipment, advertising, odometers, vehicle licensing and registration, branch locations, offsite sales, unlawful dealer activities, air pollution control, registration with the bureau of automotive repair, dmv forms, warranties, federal buyers guide, vehicle verification, vehicle history disclosure, dealer licensing requirements, and enforcement actions. The list of subjects is extensive, but the scope of coverage is limited. California law does not expect nor require a preliminary education program to cover these subjects in great detail. For example, warranties are governed by the Magnuson-Moss Warranty Act, Uniform Commercial Code, Used Motor Vehicle Trade Regulation Rule, and the Song-Beverly Warranty Act. These are large bodies of law that cover various topics such as buyers guides, express warranties, implied warranties, consumer goods, disclaimers, service contracts, remedies, defective product notices, breach of warranty, compensatory damages, incidental damages, consequential damages, and many more. But the preliminary education program will only cover buyers guides, service contracts, and defective product notices. The law limits the scope of coverage because it is not possible to cover and consume the entirety of each required subject in six hours. A comprehensive education program would take months if not years to complete. Like most professions, a licensee is expected to continue their education over time. A preliminary education program is just the starting point.

The preliminary education program consists of two components. First, students must read the vehicle dealer handbook. Second, students must pass a comprehensive final exam. The exam is timed to ensure students have read and comprehend the material in the handbook. Referring to the handbook while taking the exam is not advisable because students will not have enough time to answer all of the questions.  

The vehicle dealer handbook contains the subject matter that will prepare students to pass two exams. Students must pass a comprehensive final exam at the end of the preliminary education program to attain a certificate of completion. Students must also pass a comprehensive final exam with the DMV to attain a dealer license. 

Students can access the vehicle dealer handbook and exam after they register and pay for the preliminary education program. Once the student's information and payment are verified, he or she will receive an email with instructions on how to access the handbook and  request the dealer exam.

Students must certify that they read the handbook before they can take the exam. Students should not refer to the handbook while taking a timed exam because they will not be able to answer all of the questions. Students who fail the exam three times will not be eligible to retake it for one week. 

If you want to enroll in the preliminary education program, please register and pay for the course (see below). Once your information and payment are verified, you will receive a confirmation email with instructions on how to access the vehicle dealer handbook and exam.

The cost of the preliminary education program is $179.00