According to the California Vehicle Code, it is illegal for any person to act as a vehicle dealer without a valid license. A vehicle dealer is defined as any person who sells, exchanges, or brokers the sale of vehicles (with some exceptions for private party sales).
If a person engages in the business of buying and selling cars without a dealer's license, they may be subject to civil penalties or even criminal charges. The penalties for operating without a dealer's license can include fines of up to $10,000 and up to one year in jail.
It is important to note that the number of cars bought and sold is not the only factor considered in determining whether a person is acting as a vehicle dealer. Even if a person sells only a few cars, they may still be considered a dealer if they are doing so in a manner that suggests a commercial enterprise.
For example, if a person regularly advertises cars for sale, has a dedicated place of business for buying and selling cars, or frequently negotiates the price of cars, they may be considered a dealer even if they do not sell a large number of cars.
To avoid any legal issues, it is best to obtain a dealer's license if you are planning to buy and sell cars in California. The California Department of Motor Vehicles (DMV) offers more information on the requirements for obtaining a dealer's license.
