The term "dealer" does not include any of the following:
(a) Insurance companies, banks, finance companies, public officials, or any other person coming into possession of vehicles in the regular course of business, who sells vehicles under a contractual right or obligation, in performance of an official duty, or in authority of any court of law, if the sale is for the purpose of saving the seller from loss or pursuant to the authority of a court.
(b) Persons who sell or distribute vehicles of a type subject to registration or trailers subject to identification pursuant to Section 5014.1 for a manufacturer to vehicle dealers licensed under this code, or who are employed by manufacturers or distributors to promote the sale of vehicles dealt in by those manufacturers or distributors. However, any of those persons who also sell vehicles at retail are vehicle dealers and are subject to this code.
(c) Persons regularly employed as salespersons by vehicle dealers licensed under this code while acting within the scope of that employment.
(d) Persons engaged exclusively in the bona fide business of exporting vehicles or of soliciting orders for the sale and delivery of vehicles outside the territorial limits of the United States, if no federal excise tax is legally payable or refundable on any of the transactions. Persons not engaged exclusively in the bona fide business of exporting vehicles, but who are engaged in the business of soliciting orders for the sale and delivery of vehicles, outside the territorial limits of the United States are exempt from licensure as dealers only if their sales of vehicles produce less than 10 percent of their total gross revenue from all business transacted.
(e) Persons not engaged in the purchase or sale of vehicles as a business, who dispose of any vehicle acquired and used in good faith, for their own personal use, or for use in their business, and not for the purpose of avoiding the provisions of this code.
(f) Persons who are engaged in the purchase, sale, or exchange of vehicles, other than motorcycles, all-terrain vehicles, or trailers subject to identification under this code, that are not intended for use on the highways.
(g) Persons temporarily retained as auctioneers solely for the purpose of disposing of vehicle stock inventories by means of public auction on behalf of the owners at the owners' place of business, or as otherwise approved by the department, if intermediate physical possession or control of, or an ownership interest in, the inventory is not conveyed to the persons so retained.
(h) Persons who are engaged exclusively in the business of purchasing, selling, servicing, or exchanging racing vehicles, parts for racing vehicles, and trailers designed and intended by the manufacturer to be used exclusively for carrying racing vehicles. For purposes of this subdivision, "racing vehicle" means a motor vehicle of a type used exclusively in a contest of speed or in a competitive trial of speed which is not intended for use on the highways.
(i) A person who is a lessor.
(j) A person who is a renter.
(k) A salvage pool.
(l) A yacht broker who is subject to the Yacht and Ship Brokers Act (Article 2 (commencing with Section 700) of Chapter 5 of Division 3 of the Harbors and Navigation Code) and who sells used boat trailers in conjunction with the sale of a vessel.
(m) A licensed automobile dismantler who sells vehicles that have been reported for dismantling as provided in Section 11520.
(n) The Director of Corrections when selling vehicles pursuant to Section 2813.5 of the Penal Code.
(o)(1) Any public or private nonprofit charitable, religious, or educational institution or organization that sells vehicles if all of the following conditions are met:
(A) The institution or organization qualifies for state tax-exempt status under Section 23701d of the Revenue and Taxation Code, and tax-exempt status under Section 501(c)(3) of the federal Internal Revenue Code.
(B) The vehicles sold were donated to the nonprofit charitable, religious, or educational institution or organization.
(C) The vehicles subject to retail sale meet all of the applicable equipment requirements of Division 12 (commencing with Section 24000) and are in compliance with emission control requirements as evidenced by the issuance of a certificate pursuant to subdivision (b) of Section 44015 of the Health and Safety Code. Under no circumstances may any institution or organization transfer the responsibility of obtaining a smog inspection certificate to the buyer of the vehicle.
(D) The proceeds of the sale of the vehicles are retained by that institution or organization for its charitable, religious, or educational purposes.
(2) An institution or organization described in paragraph (1) may sell vehicles on behalf of another institution or organization under the following conditions:
(A) The nonselling institution or organization meets the requirements of paragraph (1).
(B) The selling and nonselling institutions or organizations enter into a signed, written agreement pursuant to subparagraph (A) of paragraph (3) of subdivision (a) of Section 1660.
(C) The selling institution or organization transfers the proceeds from the sale of each vehicle to the nonselling institution or organization within 45 days of the sale. All net proceeds transferred to the nonselling institution or organization shall clearly be identifiable to the sale of a specific vehicle. The selling institution or organization may retain a percentage of the proceeds from the sale of a particular vehicle. However, any retained proceeds shall be used by the selling institution or organization for its charitable, religious, or educational purposes.
(D) At the time of transferring the proceeds, the selling institution or organization shall provide to the nonselling institution or organization, an itemized listing of the vehicles sold and the amount for which each vehicle was sold.
(E) In the event the selling institution or organization cannot complete a retail sale of a particular vehicle, or if the vehicle cannot be transferred as a wholesale transaction to a dealer licensed under this code, the vehicle shall be returned to the nonselling institution or organization and the written agreement revised to reflect that return. Under no circumstances may a selling institution or organization transfer or donate the vehicle to a third party that is excluded from the definition of a dealer under this section.
(3) An institution or organization described in this subdivision shall retain all records required to be retained pursuant to Section 1660.
(p) A motor club, as defined in Section 12142 of the Insurance Code, that does not arrange or negotiate individual motor vehicle purchase transactions on behalf of its members but refers members to a new motor vehicle dealer for the purchase of a new motor vehicle and does not receive a fee from the dealer contingent upon the sale of the vehicle.
Added Stats 1959 ch 1996 § 1.5. Amended Stats 1967 ch 394 § 1; Stats 1968 ch 505 § 1; Stats 1970 ch 1290 § 1, ch 1446 § 1; Stats 1974 ch 687 § 2; Stats 1976 ch 1284 § 3; Stats 1979 ch 622 § 3; Stats 1980 ch 629 § 1; Stats 1984 ch 1407 § 1; Stats 1988 ch 546 § 1; Stats 1989 ch 923 § 2; Stats 1991 ch 13 § 14 (AB 37), effective February 13, 1991, ch 928 § 13 (AB 1886), effective October 13, 1991; Stats 1992 ch 127 § 1 (AB 2273); Stats 1994 ch 1253 § 5 (AB 3539).
Amended Stats 2001 ch 460 § 1 (AB 871).
Amended Stats 2001 ch 539 § 2.5 (SB 734).
Amended Stats 2002 ch 758 § 3 (AB 3024).
Amended Stats 2004 ch 836 § 2 (AB 2848).
ANNOTATIONS
Amendments:
1967 Amendment:
Added (1) ", minibikes, tote goats, and vehicles of a similar nature which are not intended for use on the highways" at the end of subd (g); and (2) subd (h).
1968 Amendment:
(1) Added "banks," in subd (a); (2) substituted "vehicles" for "vehicle" after "sell such" in subd (a); (3) added the second sentence of subd (d); and (4) substituted "same" for "sale" in subd (e).
1970 Amendment:
Added subd (i). (As amended Stats 1970 ch 1446, compared to the section as it read prior to 1970. This section was also amended by an earlier chapter, ch 1290. See Gov C § 9605.)
1974 Amendment:
(1) Deleted former subd (f) which read: "(f) Persons who are engaged in a business involving the purchase, sale or exchange of boat trailers."; (2) redesignated former subds (g)-(i) to be subds (f)-(h); and (3) deleted "boat trailers or" after "this code," in subd (f).
1976 Amendment:
Added subds (i) and (j).
1979 Amendment:
Amended subd (f) by substituting "the purchase, sale or exchange of vehicles, other than motorcycles subject to identification under this code," for "a business activity which does not involve the purchase, sale or exchange of vehicles except incidentally in connection with the purchase, sale or exchange of vehicles of a type not subject to registration under this code, midget autos or racers of a type advertised as being built exclusively for use by children, minibikes, tote goats, and vehicles of a similar nature".
1980 Amendment:
Added subd (k).
1984 Amendment:
Added subd (l ).
1988 Amendment:
(1) Generally eliminated "such"; (2) substituted "sells" for "shall sell such" after "of business, who" in subd (a); (3) amended subd (d) by substituting (a) ", if, no federal excise tax is legally payable or refundable on any of the transactions" for "; provided, no federal excise tax is legally payable on any of such transactions, or such tax is legally refundable on such transactions" at the end of the first sentence; and (b) "engaged exclusively" for "exclusively engaged" near the beginning of the second sentence; (4) amended subd (e) by (a) substituting "who dispose of any vehicle acquired and used in good faith, for their own personal use, or for use in their business" for "disposing of vehicles acquired for their own"; and (b) deleting "when the same shall have been so acquired and used in good faith" after "their business"; (5) amended subd (g) by (a) substituting "by means of public auction on behalf of the owners at the" for "on behalf of the owners thereof by means of public auctions at the location of such"; and (b) adding "that" after "department, provided"; (6) added "to be used" after "the manufacturer" in the first sentence of subd (h); (7) substituted "sells" for "is selling" after "Code) and who" in subd (l ); and (8) added subd (m).
1989 Amendment:
Added subd (n).
1991 Amendment (ch 13):
(1) Substituted ", if" for "; provided," after "court of law" in subd (a); (2) substituted ". However," for "; provided, however, that" in subd (b); (3) added the commas after "exporting vehicles" and after "delivery of vehicles" in the second sentence of subd (d); and (4) substituted "if" for "provided that" after "the department," in subd (g).
1991 Amendment (ch 928):
Substituted "salespersons" for "salesmen" in subd (c).
1992 Amendment:
(1) Added "any of the following" in the introductory clause; (2) amended subd (a) by deleting (a) "or" after "or obligation,"; and (b) "of competent jurisdiction" at the end of the subdivision; (3) amended the second sentence of subd (b) by (a) deleting "if" after "However,"; (b) adding "who" after "persons"; and (c) substituting "are" for ", they shall be deemed to be" after "at retail"; (4) substituted "are" for "shall be" after "United States" and "vehicles produce" for "the vehicles produces" in second sentence of subd (d); (5) substituted subds (i)-(k) for former subds (i)-(k) which read: "(i) Any person who is a 'lessor' as defined in Section 372.
"(j) Any person who is a 'renter' as defined in Section 508.
"(k) Any 'salvage pool' as defined in Section 543."; (6) substituted "automobile dismantler" for " 'automobile dismantler' as defined in Section 220" in subd (m); and (7) added subd (o).
1994 Amendment:
Added subd (p).
2001 Amendment:
(1)Added "or trailers subject to identification pursuant to Section 5014.1" in the first sentence of subd (b); (2)substituted "owners' place of business" for "owners place of business" in subd (g); and (3)substituted subd (o) for former subd (o) which read: "(o) Any public or private nonprofit charitable, religious, or education institution or organization that sells vehicles if all of the following conditions are met:
"(1) The proceeds of the sale of the vehicles are retained by that institution or organization for its charitable, religious, or education purposes.
"(2) The vehicles sold were donated to the institution or organization.
"(3) They meet all of the applicable equipment requirements of Division 12 (commencing with Section 24000) and have been issued a certificate pursuant to Section 44015 of the Health and Safety Code.
"(4) The institution or organization has qualified for state tax-exempt status under Section 23701d of the Revenue and Taxation Code, and federal tax-exempt status under Section 501(c)(3) of the Internal Revenue Code." (As amended 2001 ch 539, compared to the section as it read prior to 2001. This section was also amended by an earlier chapter, ch 460. See Gov C § 9605.)
2002 Amendment:
Added "or trailers" in subd (f).
2004 Amendment:
(1) Amended subd (f) by (a) adding ", all-terrain vehicles,"; and (b) substituting "that are" for "which are"; and (2) substituted "A" for "Any" at the beginning of subds (i)-(m) and (p).
Historical Derivations:
(a) Former Veh C § 73, as enacted Stats 1935 ch 27, amended Stats 1937 ch 706 § 1, repealed and added Stats 1957 ch 1319 §§ 3, 4.
(b) Stats 1923 ch 266 § 19 1/2, as added Stats 1927 ch 752 § 5.
Note:
Stats 1991 ch 13 § 68 and ch 928 § 43 provide:
If any provision of this act or the application thereof to any person or circumstances is held invalid, that invalidity shall not affect other provisions or applications of the act which can be given effect without the invalid provision or application, and to this end the provisions of this act are severable.
Note:
Stats 1994 ch 1253 provides:
SECTION 1. The Legislature finds and declares all of the following:
(a) The distribution, sale, and service of new motor vehicles in the State of California vitally affects the general economy of the state and the public welfare.
(b) The new motor vehicle franchise system, that operates within a strictly defined and highly regulated statutory scheme, assures the consuming public of a well organized distribution system for the availability and sale of new motor vehicles throughout the state; a network of quality warranty and repair facilities to maintain those vehicles; and a cost-effective method for the state to police those systems through the licensing of private sector franchisors and franchisees.
(c) It is the intent of the Legislature in enacting this act to protect the integrity and benefits of the new motor vehicle franchise system, while also affording consumers the choice and flexibility of utilizing the services of an autobroker to arrange or negotiate new car purchases within a framework that ensures a high level of consumer protection and accountability. This act is intended to legitimize the activity of motor vehicle brokering by defining that activity and permitting any holder of a motor vehicle dealer license to register with the Department of Motor Vehicles as an autobroker and thereafter engage in brokering activities pursuant to the provisions of this act.
Cross References:
"Dealer": Veh C § 285
"Distributor": Veh C § 296
"Highway": Veh C § 360
"Motorcycle": Veh C § 400
"Person": Veh C § 470
"Trailer": Veh C § 630
"Vehicle": Veh C § 670
"Vehicle manufacturer": Veh C § 672
"Vehicle salesperson": Veh C § 675
Vehicle sales: Veh C §§ 9950 et seq
Collateral References:
Law Review Articles:
Review of Selected 1976 California Legislation. 8 Pacific LJ 430