Free practice test

California Dealer License Practice Test

Forty questions in the DMV exam's format, drawn from our own course material. Answer all forty, see your score instantly, and unlock the full answer review — every correct answer with a short explanation — when you join the founding list.

Honest label: this is a practice test. It is not the DMV exam and not our course final — the DMV does not publish its questions. It is a readiness check, free, with no obligation.

The real exam, in brief

What the state's test actually looks like

40 multiple-choice questions, taken in person at a DMV Occupational Licensing office, after you complete the required 6-hour pre-license course and hold your certificate.
70% to pass — 28 of 40 correct. The exam fee is $16.
Three attempts, at least a week apart, $16 per retest. Fail a third time and the education program must be repeated before testing again.
The exam is administered in English — which is why our course teaches in Spanish but tests in English, and why this practice test exists in both.

This practice test mirrors that format on purpose, so the real one feels familiar. Ready?

The practice test

40 questions — answer them all, then score

1. A person buys cars at auction specifically to resell them for a profit, without a dealer license. Under California law, that person is…

Selling cars without a license — a crimeA casual seller, as long as the cars were titled in their own nameActing legally, provided fewer than five cars a year change handsRequired only to report the income at tax time

Explanation: Buying cars to resell for profit counts as selling cars under the law, and selling cars for profit without a dealer license is a crime. What matters is the intent at purchase, not whose name is on the title.

2. Which applicant is exempt from the education requirement?

A dealer adding a second locationA wholesale-only dealerA retail used-car dealerA dismantler

Explanation: The education exemption in Vehicle Code §11704.5(e) covers dismantlers, along with new-vehicle dealers and dealers who sell only motorcycles, trailers, or ATVs.

3. An applicant has failed the written exam twice. Which statement about further attempts is correct?

Retests are free and unlimitedEach retest waits at least one week and costs $16 — and a third failure means repeating the education program before testing againThe applicant must wait one full year before any retestA second failure permanently bars the applicant from licensing

Explanation: You get three attempts, spaced at least a week apart, with a $16 fee for each retest. After a third failure, the education program must be repeated before another attempt.

4. To keep a dealer license in force, the dealer must…

Renew every five years by posting a new bondRenew every two years and complete four hours of continuing education in each renewal cycleRenew every year, with no further educationRetake this pre-licensing course every year

Explanation: A dealer license runs on a two-year cycle, and four hours of continuing education are due in each cycle to keep it in force.

5. What does the single-document rule require?

All agreements between buyer and seller are contained in the single contract documentOnly one contract may exist per dealershipFinancing must come from a single lenderThe buyer signs only one page

Explanation: The single-document rule means the conditional sale contract contains the entire agreement — price, terms, and every promise — in one document.

6. A conditional sale contract is used when…

The buyer takes the vehicle now and pays over time, with the seller or lender holding a security interestA vehicle is sold at auction to a wholesalerThe buyer pays cash in full at deliveryTwo dealers trade inventory

Explanation: A conditional sale is a credit sale: the buyer takes the vehicle now, pays over time, and the vehicle itself secures the obligation.

7. During the sale, the salesperson promises free oil changes for a year but never writes it into the contract. Under the single-document rule…

Only promises over $500 must be writtenThe promise was required to be in the contract — leaving it out violates the ActThe promise is automatically void, so there is no issueThe promise binds the dealer anyway, verbally

Explanation: A promise made during the sale is part of the deal. Leaving it out of the single contract document violates the Act, whether or not the promise is later honored.

8. Truth in Lending disclosures for vehicle financing are implemented by…

DMV form OL 4005Civil Code §2981 onlyRegulation ZThe FTC Buyers Guide

Explanation: Regulation Z is the federal regulation that implements the Truth in Lending Act and defines the credit disclosures a financing offer must make.

9. In arranging credit, a dealer may not discriminate based on…

Protected characteristics such as race, sex, or marital statusThe size of the down paymentThe lender the buyer prefersThe vehicle's age

Explanation: The Equal Credit Opportunity Act bars discrimination in any part of a credit transaction on protected grounds such as race, sex, or marital status — including credit that a dealer arranges.

10. 'Payment packing' describes…

Quoting a payment that already includes taxOffering several lenders' quotes at onceFolding optional products into the payment without the buyer's clear knowledge, inflating what they agree toRounding a payment to the nearest dollar

Explanation: Payment packing folds optional products into the quoted payment so the buyer agrees to a larger amount without ever clearly agreeing to the products themselves — a deceptive practice.

11. Dealers report and remit vehicle sales tax to…

The DMV cashier directlyThe Franchise Tax BoardThe county tax collectorCDTFA (California Department of Tax and Fee Administration)

Explanation: Vehicle sales and use tax is administered by the CDTFA (California Department of Tax and Fee Administration); dealers report and remit it there.

12. Sales tax a dealer collects from a buyer is best described as…

A lender feeMoney held in trust for the state — the dealer is liable for it until remittedDealer income that can offset expensesA deposit the dealer may refund at will

Explanation: Tax collected from a buyer is the state's money, held in trust. It is never the dealer's income, and the dealer stays liable for it until it is remitted.

13. In a CDTFA audit, the dealer's best protection is…

A good memoryKeeping records at a second, undisclosed locationComplete transaction records that reconstruct every sale and the tax collected on itCash-only deals

Explanation: Audits are documentary. Complete records that reconstruct every sale and the tax collected on it are the dealer's real protection in a CDTFA audit.

14. Vehicle Code Division 12 primarily covers…

Dealer licensing feesSales tax districtsAdvertising rulesRequired vehicle equipment and safety standards

Explanation: Division 12 of the Vehicle Code is the equipment chapter — brakes, lamps, glazing, tires, and the other required vehicle equipment and safety standards.

15. A retail vehicle is missing required safety equipment at delivery. The dealer's position is…

Protected, because the buyer signed 'as is'Exposed — retail vehicles must be delivered meeting equipment requirementsThe auction house's problem aloneFine, if the price was discounted

Explanation: Required safety equipment is a delivery standard for retail sales. An 'as is' signature from the buyer does not waive it.

16. A windshield crack seriously obstructs the driver's forward view. The dealer should…

Note it verbally and deliver the carTreat the glazing as non-compliant equipment and correct it before retail deliveryHave the buyer sign a waiverOffer a small discount instead

Explanation: Glazing that seriously obstructs the driver's view fails the equipment standards. The correct response is to fix it before retail delivery; discounts and waivers do not cure it.

17. How must a specific vehicle in an advertisement be identified?

Identification is never requiredBy stock number or VIN so the exact vehicle is identifiableBy color aloneBy the salesperson's initials

Explanation: An advertised vehicle must be identified so the exact unit is recognizable — normally by stock number or VIN.

18. An ad promotes a factory rebate. What must the ad do?

State the rebate's terms and conditions accuratelyHide the terms to drive phone callsMention the rebate only verballyPromise the rebate to every buyer regardless of eligibility

Explanation: Incentive advertising must state the rebate's terms and conditions accurately. Eligibility limits are part of the offer, not fine print to hide.

19. The specific vehicle in your ad sells on Saturday, but the ad keeps running all week online. That is…

Smart inventory marketingFine if a similar car is in stockA violation — advertising a vehicle you no longer have available is bait advertisingRequired, to honor the ad's run dates

Explanation: Once the advertised vehicle is sold, the ad must stop. Continuing to run it draws buyers in with a car you no longer have — bait advertising.

20. An ad promises 'we pay off your trade-in no matter what you owe.' To stay lawful, the claim must be…

Printed in large typeApproved by the lenderTrue, and honored on the terms stated, for the customers it attractsAspirational

Explanation: A payoff claim in advertising is a representation. It must be true and honored on the terms stated, for the customers the claim attracts.

21. At transfer of a vehicle, federal odometer law requires…

Disclosure only to lendersA verbal statement of mileageNothing for vehicles over 10 years old in all casesA written disclosure of the odometer reading and its status

Explanation: The Federal Odometer Act requires a written disclosure of the odometer reading and its status at transfer — a verbal statement does not satisfy it.

22. An older odometer has rolled past its highest reading and started again at low numbers. The disclosure must state…

That the mileage exceeds the odometer's mechanical limitsThat the car is 'like new'The low reading, with no commentZero — the odometer reset itself

Explanation: The disclosure has three formal mileage statuses: actual mileage, mileage that exceeds the odometer's mechanical limits, and not actual mileage. A rolled-over odometer falls in the second.

23. A car's odometer is completely inoperative and reads nothing. Selling it without any mileage disclosure is…

A violation — the disclosure states the odometer is inoperative and mileage cannot be determinedAcceptable — there is no reading to discloseFine on vehicles over 100,000 milesA matter for the buyer to raise

Explanation: An inoperative odometer is itself a disclosure event: the written statement records that the odometer reads nothing and the mileage cannot be determined.

24. Since 2019, California dealers at the point of sale issue…

Nothing — buyers visit DMV themselvesTemporary license plates for the sold vehicleA paper windshield notice onlyPermanent metal plates from DMV stock

Explanation: Since AB 516 took effect in 2019, dealers issue temporary license plates at the point of sale, so the vehicle is identifiable and legally driven from day one.

25. A weekend tent sale at a fairground, away from the licensed lot, is…

Always prohibitedPermitted only under DMV's offsite-sale conditionsPermitted if no signs are postedA branch opening, automatically

Explanation: Sales away from the licensed location — like a fairground tent sale — happen only under DMV's offsite-sale conditions. A lot is a specific licensed place, not wherever cars are parked.

26. Putting dealer plates on your spouse's personal commuter car is…

Outside the plates' lawful use — they belong on dealership-owned vehicles in the course of businessA normal perk of ownershipLegal on weekendsFine if the car is sometimes used for errands

Explanation: Dealer plates are a business tool with a defined scope: dealership-owned vehicles, used in the course of business. Personal commuting by family members is outside that scope.

27. The federal Buyers Guide must be…

Kept in the deal jacket onlyGiven to the buyer a week after the saleUsed only for vehicles with warrantiesDisplayed in the window of used vehicles offered for sale

Explanation: The FTC Used Car Rule requires the Buyers Guide to be displayed in the window of each used vehicle offered for sale, disclosing whether it is sold with a warranty or 'as is'.

28. When a dealer provides a written warranty on a vehicle, California law generally…

Erases all other legal dutiesApplies only to new carsMakes service contracts freePrevents the dealer from disclaiming the implied warranty of merchantability on that vehicle

Explanation: Under the Song-Beverly Act, a dealer who gives a written warranty — or sells a service contract on the vehicle — cannot then disclaim the implied warranty of merchantability for that vehicle.

29. A vehicle carries a branded title. Marketing it as a 'certified' used car is…

Allowed if the certification is the dealer's own programAllowed with a footnoteProhibited — disqualifying history bars the 'certified' labelFine after a thorough inspection

Explanation: California bars the 'certified' label for vehicles with disqualifying history such as a branded title. A thorough inspection does not remove the bar.

30. Which vehicle is exempt from smog certification at sale?

A 2010 hybridA 2005 diesel pickupA 2015 gasoline sedanA fully electric vehicle

Explanation: Fully electric vehicles are exempt from smog certification at sale, as are gasoline vehicles from 1975 and older and diesels from 1997 and older. Hybrids are not exempt.

31. The smog certificate a seller provides at a retail sale must have been issued…

Any time in the car's lifeWithin the last 2 yearsWithin the 90 days before the saleOnly at the last registration renewal

Explanation: A transfer smog certificate must be current — issued within the 90 days before the sale — so it reflects the vehicle actually being sold.

32. A 1996 diesel pickup is offered for retail sale. Smog certification…

Is replaced by a visual inspectionIs required — diesels are never exemptIs the buyer's job after purchaseIs not required — diesels model-year 1997 and older are exempt

Explanation: The diesel smog exemption runs through model year 1997. A 1996 diesel is exempt; a 2005 diesel is not.

33. The invoice closing out a repair job must…

Show one lump-sum total onlyBe kept secret from the customerItemize the parts and labor charged, consistent with the authorized estimateBe written by the technician from memory

Explanation: Bureau of Automotive Repair rules require the final invoice to itemize the parts and labor charged, so the bill can be checked against the estimate the customer authorized before work began.

34. 'Curbstoning' describes…

A discount pricing strategySelling cars from a licensed lot near a curbSelling vehicles for profit without a dealer license, posing as a private sellerParking inventory on the street overnight

Explanation: Curbstoning is selling vehicles for profit without a dealer license while posing as a private seller — an unlawful activity, not a pricing strategy.

35. DMV enforcement against a dealer can take which forms?

None — DMV cannot enforceAdministrative onlyAdministrative, civil, and criminalA warning letter only

Explanation: DMV enforcement against a dealer can proceed administratively, civilly, and criminally — it is not limited to warnings.

36. The acquisition check that keeps stolen vehicles out of inventory is…

Washing the car before appraisalVerifying the public VIN and a secondary identifier against the title documents on every vehicleChecking that the keys workAsking the seller if the car is stolen

Explanation: The anti-theft check is a routine applied to every acquisition, not a suspicion-based one: verify the public VIN and a secondary identifier against the title documents on each vehicle.

37. The Statement of Facts (REG 256) is used to…

Make a signed declaration that supports a transaction, explains a discrepancy, or clarifies the recordAdvertise the dealershipReplace the sales contractApply for the dealer bond

Explanation: The Statement of Facts (REG 256) is a signed declaration used to support a transaction, explain a discrepancy, or clarify the record — it does not replace the sales contract.

38. Departmental forms for a transaction should be completed…

At the end of the month, in a batchOnly when DMV asksBy the buyer at homeAccurately and completely, at the time of the transaction

Explanation: Departmental forms are contemporaneous records of the deal. They are completed accurately and completely at the time of the transaction; back-filling them later is how errors and suspicions start.

39. When DMV inspectors visit, dealer forms and sales records must be…

Available for inspection at the licensed locationShown only to the dealer's attorneyMailed to Sacramento within a weekReconstructed from memory

Explanation: Dealer forms and sales records are maintained at the licensed location so DMV inspectors can examine them there when they visit.

40. Secure departmental forms are 'controlled documents,' which means…

Only managers may look at themThey expire at the end of each monthThey are printed on special paper, and that is allEvery form is accounted for at all times — used, voided, or on hand

Explanation: Secure forms such as Reports of Sale, odometer statements, and temporary plates are controlled documents: every form is accounted for at all times as used, voided, or on hand, so the count always reconciles.

Your score

Unlock the full answer review

Enter your name and email to see the correct answer and an explanation for every question — and to join the founding list for first access and launch pricing when the course opens. Your score is already shown above; the review unlocks right here on this page.

Founding list only — no course is being sold and no payment is taken yet.

Your full review is below

Every question now shows the correct answer in green, your answer in red where you missed, and a short explanation. Want another run at it? Refresh the page and start again.

Straight answers

Practice test FAQ

Is this the actual DMV exam?

No. The DMV does not publish its exam. This is a practice test built from our own course material, in the same format: 40 multiple-choice questions and the same 70% pass line. It is not the DMV exam, and it is not our course final.

Does my practice score count toward my license?

No. It is a readiness check. The license path is: complete the 6-hour pre-license course with an approved provider, receive your certificate, then pass the state's exam in person. Our course opens when DMV approval issues; the founding list hears first.

What does the real exam cost, and how many tries do I get?

The exam fee is $16. You may attempt it three times, at least a week apart, at $16 per retest; after a third failure, the education program must be repeated before testing again.

Why is there a Spanish version if the state exam is in English?

For the same reason as our course design: you learn the material in the language you understand best, then meet the exam in its language. This Spanish practice test builds understanding; our course final and exam simulator run in English with explanations available in Spanish, so nothing about the real exam surprises you.

The full path, once you are ready: the 6-hour pre-license course, this exam, then the paperwork — the $50 Template Kit completes it, and How It Works walks the whole chain.