Why “authorized use of California dealer plates” matters
Dealer plates are a privilege that lets licensed dealers move inventory without registering every vehicle. Misusing them can trigger fines, plate confiscation, and DMV disciplinary action. This guide explains who can drive, which cars qualify, business-only purposes, and the recordkeeping practices that keep you compliant.
Who may legally operate a dealer-plated vehicle?
listed on the dealer license who are actively engaged in management.CVC §11715(a) - Licensed salespeople or other employees driving within the course and scope of employment.
- Prospective purchasers during a demo or test drive (up to seven consecutive days) when they carry a written “7-Day Test-Drive Letter.”DMV Dealer Handbook
- Household members may drive only to pick up or drop off an owner/officer and never for personal errands.
Which vehicles may display dealer plates?
- Inventory vehicles owned or lawfully possessed by the dealership and offered for sale.
- Vehicles being shuttled to or from auctions, reconditioning shops, or another licensed location.
- Newly sold units en route to the customer before title transfers.
Dealer plates may not be used on service trucks, parts-delivery vans, tow units, or vehicles already registered in the dealer’s name.13 CCR §201.00
Permitted business uses
- Demonstration drives with customers or sales staff.
- Transporting inventory between lots or to repair facilities.
- Dealer-sponsored events or displays (when accompanied by an OL 73/73A off-site sale permit).DMV Form OL 73
- Delivery of a vehicle to the retail buyer prior to registration.
The 7-Day Test-Drive Letter
California allows an unaccompanied prospect to keep a vehicle for up to seven days. The dealer must issue a letter on company letterhead that names the driver, VIN, plate number, start/end dates, and insurance confirmation. Keep a copy in your deal jacket and note the transaction in the plate log.
Common misuse scenarios to avoid
- Personal errands, vacations, or commuting to a non-dealer job.
- Lending a dealer-plated car to friends, family, or customers waiting for financing.
- Using plates on rental or courtesy shuttle vehicles.
- Displaying a dealer plate on a vehicle hauling other cars or freight.
Each violation can carry a $200–$1,000 fine and may trigger suspension of the dealer license.CVC §11705(b)
Recordkeeping & plate security best practices
| Best Practice | Why It Matters |
| Maintain a bound or digital plate log showing date, driver, vehicle, and destination. | Required proof for DMV and law enforcement audits. |
| Lock plates in a secure cabinet when not in use. | Reduces theft and unauthorized use. |
| Issue written authorizations (test-drive letters, event permits) and keep copies. | Demonstrates compliance with Vehicle Code §11715(c). |
| Inspect plates weekly for damage or loss; report missing plates within 24 hours. | Avoids liability for tickets or toll violations. |
Key takeaways
- Dealer plates exist to facilitate business, not personal transportation.
- Only authorized individuals may drive, and only inventory vehicles qualify.
- Always document who has the plate, why, and for how long.
- Misuse can jeopardize your dealership’s license—train every employee annually.
