Vehicle Industry Registration Procedures Manual

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Section 7 of 38

Chapter 6: New Vehicles Sold by California Dealers

6.025 New Vehicle Sales by a California Dealer

Chapter 6 New Vehicles Sold by California Dealers

6.025 New Vehicle Sales by a California Dealer (CVC §§4150, 4150.5, 4456, 5901, and 11714)

California dealers must submit to the Department of Motor Vehicles a completed Application for Registration of New Vehicle (REG 397) form or a Multiple Vehicle Report of Sale (REG 397A) form for all new vehicles sold by the dealer with any supporting documents and the fees due within 20 days to avoid penalties and an administrative service fee (ASF). As of July 1, 2012, or later, dealers must use REG 397 (REV. 11/2012) or later revision date.

A dealer cannot advertise for sale, sell, or purchase for resale any new vehicle of a make for which the dealer does not hold a franchise (CVC §11713.1(f)).

The dealer, authorized employee, or agent for the dealer must submit:

  • Properly and legibly completed REG 397 to ensure the accuracy of the California Certificates of Title issued. Incomplete, incorrect, or unclear information reported on the REG 397 can be costly and inconvenient to all parties involved.

The REG 397 is completed as follows:

SectionInformation Required
Date First Sold as a New Vehicle (MM/DD/YYYY)The date the buyer paid the purchase price, signed a purchase contract/security agreement, and took possession/delivery of the vehicle.
Date First Operated (MM/DD/YYYY)The date the vehicle was first operated by the retail buyer.
Fees are due based on the “Date First Operated” date.
NRM/INDThis box is checked if the vehicle is being registered to nonresident military (NRM) personnel, their nonresident spouse, or a member of a California Indian tribe living on a federal Indian reservation or rancheria in California. Refer to Additional Information in this section for fee exemption and
additional documentation requirements.
MakeThe make or DMV’s make abbreviation. The vehicle identification number analysis (VINA) program generates most makes. Key DMV’s make abbreviation if the make is not generated. Do not key the vehicle model as the make.
Trailers are not in the VINA program. Key the correct make if an incorrect make generates when the vehicle identification number (VIN) is entered.
Year ModelThe manufacturer’s designated year model.
• Do not return an application or a report of deposit of fees (RDF) for missing year model information.
• Do not write in a year model omitted by the dealer.
Body TypeThe body type model (BTM) abbreviation used by DMV.
Motive PowerThe motive power must be indicated for all vehicles.
Number of AxlesRequired for commercial vehicles and trailers, except trailer coaches (CCH) and camp (CMP) trailers.
Unladen WeightRequired for commercial vehicles and trailers, except trailer coaches (CCH) and camp (CMP) trailers.
Vehicle Identification NumberA valid 17-digit VIN must be shown for a passenger vehicle, truck, bus, motorcycle, trailer, or cab and chassis operated on the roads and highways.
Return the application to the dealer if the VIN does not pass the check-digit. Refer to Chapter 1 for additional information.
M/C Engine Number or Additional Identification NumberRequired for motorcycles. Use the serial number on the motor for an electric motorcycle’s engine number.
OHV/MC Dealers OnlyRequired for on-highway and off-highway vehicles.
Length and Width in InchesRequired for CMP, trailer CCH, and motorhomes. A Statement of Facts (REG 256) form with the motorhome length and width may be submitted.
GVWR (Pickups only)Gross vehicle weight rating (GVWR) is required for all pickup trucks.
County of ResidenceThe county the buyer lives in. It may differ from the mailing address county.
Sold toTrue Full Name—The printed name of each buyer. Either the “AND” or “OR” box should be checked if more than one buyer is named. Documents are printed with “AND” if a box is not checked.
Leased Vehicles—The lessor’s printed name followed by the abbreviation “LSR” and the lessee’s printed name followed by the abbreviation “LSE” are required.
Equipment Number—Entered only on fleet vehicles.
Driver License/ID Card No.—The California DL/ID number must be entered for each registered owner or lessee (if the lessee is an individual). If a California DL/ID has not been issued, the out-of-state DL/ID number and state of issuance is shown. Do not request DL/ID number verification.
Return applications missing the DL/ID number information.
Do not key a fictitious DL/ID number.
A DL/ID number is not required for vehicles registered to a company, business, or trust.
Purchaser’s Address—The buyer’s business or residence and mailing address, if different. The trailer coach or vessel location is entered in the space for the mailing address.
Lienholder or Legal OwnerMust show a name and address or the word “None.” Return applications without this information.
The person entering this information should initial the entry, but do not return an application solely for missing initials.
Electronic Lienholder ID #—The Electronic Lien and Title (ELT) # is entered, if applicable. The lienholder name and address must be entered exactly as shown on the ELT listing which is updated quarterly.
Date—Must be completed.
Buyer’s Signature(s)—Must be completed.
Leased Vehicles—Only the lessor’s signature is required; the lessee’s signature is optional.
Certificate of CostLine 1A or B must be completed including checking the boxes on line A, the Date Purchased/Acquired, and the cost which is the full cost price of the vehicle to the buyer, excluding sales tax, license fees, or financing costs.
Federal Retail Excise Tax is included in the price on the first retail sale of a commercial truck or truck chassis with a gross vehicle weight (GVW) of 33,001 pounds or more and a permanent trailer identification (PTI) trailer or trailer chassis with a GVW of 26,001 pounds or more.
Odometer Disclosure StatementThe odometer reading, Dealer’s Number, Date, Signature(s) and Handprinted name(s) of the buyer and seller and dealers number.
Certificate of Unladen Weight of Vehicle
(For Commercial Motor Vehicles Only)
On new vehicles, dealers may certify to the unladen weight of commercial vehicles up to 8,000 pounds or over 10,001 pounds and all trailers. A weight certificate is required for any two-axle or three-axle commercial vehicle between 8,001 and 10,000 pounds unladen. Refer to Chapter 13 for exceptions to the weight certificate requirement.
Dealer’s CertificationThe dealer must complete the certification. In lieu of a smog certification for a new vehicle sold by a licensed California dealer. This section of the REG 397 certifies to the statement made in the Statement of Seller and Certificate of Cost sections of the form, and certifies that the dealer has a valid franchise on file with DMV to sell new vehicles.
The dealer may make corrections on any part of the REG 397 except the odometer disclosure section. The dealer or the dealer’s authorized employee/agent who signed the dealer certification must approve the correction by initialing next to the correction. Refer to Chapter 5 for errors made in reporting the odometer mileage.
  • A Statement to Record Ownership (REG 101) form, when necessary to correct or clarify the owner’s name and/or address.
  • Fees due based on the “Date First Operated” indicated on the REG 397.
  • Required supporting documents, as shown in the Additional Information at the end of this section.

Application for Registration of Multiple New Vehicles (REG 397A)

Dealers may use the REG 397A to report sales of identical new vehicles to the same registered owner.

The REG 397A does not provide operating indicia for the vehicles. Individual REG 397 forms must be submitted if operating indicia is needed.

The REG 397A requirements are:

  • A maximum of 25 vehicles may be listed.
  • All vehicles must be identical except for the last nine digits of the VIN, the equipment number, if any, and the odometer reading.
  • The registered owner name and address, legal owner (lienholder) name and address, purchase price, and date of sale must be the same for all vehicles.
  • The REG 397A must be completed by printing in ink or typed.
  • All required printed names and signatures must be on the REG 397A.

Additional Information

Cab and Chassis— An incomplete vehicle that requires the installation of a body to complete the vehicle.

If the dealer installs a body on the cab and chassis received from the factory before the sale is complete, it is reported as a complete vehicle.

If the dealer sells the cab and chasis to a buyer that never intends to install a body, the vehicle is reported as a chassis only or cab and chassis. Refer to the New Vehicles Altered Before Registration section in this chapter for application requirements.

If the dealer installs a body provided by the customer, the vehicle is reported as a chassis only or cab and chassis and the application must include documentation for the body. Refer to the New Vehicles Altered Before Registration section in this chapter for application requirements.

Courtesy Deliveries—A new vehicle sold by an out-of-state dealer and delivered to the buyer by a California dealer . The application is processed the same as other dealer transactions. The California dealer completes the REG 397 and writes “Courtesy Delivery” on it. The vehicle must comply with California smog requirements and the California dealer must collect California sales tax. If the buyer was given the manufacturer’s statement of origin by the selling dealer, it should be submitted with the application.

Demonstrator Vehicles—A Used Vehicle Certification (REG 496) form must be submitted with the application. Only one co-owner signature is required.

A dealer who registers a new vehicle from his stock cannot charge a subsequent buyer any portion of the VLF.

Exempt Agency Sales—the dealer may give the REG 397 and supporting documents to the exempt agency. If submitted by a dealer, an Application for Exempt Registration (REG 5050) form completed by the exempt agency must accompany the REG 397.

Factory Deliveries—A California dealer who sells a vehicle to be picked up by the buyer at the factory must complete a REG 397 and submit it to DMV. Process the application as usual.

Foreign Resident In-Transit Permit—A foreign visitor who prearranges to buy a new American-made automobile or motorcycle in California before entering the United States, may obtain a 30-day in-transit permit. This permit allows them to operate the vehicle in California for up to 30 days, without payment of registration fees or sales tax. Refer to Chapter 25 for permit requirements.

Housecars—A Miscellaneous Certifications (REG 256A) form with the Vehicle for Human Habitation section completed must be submitted in addition to the usual registration documents required for the application to determine the type of housecar being registered.

Leased Vehicles—The bank acquisition fee is not included when establishing the VLF classification. Refer to Chapter 3 for additional information.

Motorhomes—The length and width of a new motorhome must be entered on the REG 397 or submitted on a REG 256. Motorhomes that do not exceed 45 feet (540 inches) in the overall length or 8.5 feet (102 inches) in width may be registered in California (CVC §§35100 and 35400).

Rollbacks and Unwinds (CVC §5901)—A rollback occurs when:

  • A buyer purchases a vehicle from a dealer, operates it on the customer copy of the report of sale, and returns the vehicle to the dealer.
  • Financing is rejected for a buyer so a second contract is completed with a cosigner, another name added, or a new buyer.

The report of sale cannot be voided on rollbacks. All fees due, including any transfer fees, are payable upon the date of the first retail sale.

If a dealer sells a vehicle to a purchaser whose financing is rejected (requiring a new contract) and the replacement contract has a cosigner, another party added, or a new purchaser, the application is a rollback.

An unwind occurs when the report of sale document is completed by the dealer, but must be voided because the sale was not consummated and the buyer never took delivery. Refer to Chapter 11 for additional information.

Vehicle to be Altered Before Registration—The dealer may give the application copy of the REG 397 to the purchaser when a new vehicle will be altered before it is registered. Refer to the New Vehicles Altered Before Registration section of this chapter for registration.