Yes, a licensed automotive repair shop in California can sell cars, but it is a legally complex process with significant restrictions. A repair shop cannot operate as a traditional car dealer without a specific Department of Motor Vehicles (DMV) dealer license. The primary legal distinction is that a shop can typically only sell cars that it has taken in as mechanical lien sales—vehicles abandoned by customers after repairs are completed—or occasionally sell its own company-owned vehicles. They cannot routinely buy and sell cars from auctions or the public as a business model without the proper dealer license.
The process for selling a lien vehicle is strict. The shop must follow precise California Civil Code procedures for notifying the owner and any lienholders, waiting a mandatory period (often 60 days), and obtaining a lien sale documents packet from the DMV before a public auction can be held. Attempting to sell cars without adhering to these rules can result in severe penalties, including fines and the loss of the shop's business and repair licenses.
For consumers, buying from a repair shop carries different considerations than buying from a licensed dealer.
| Aspect | Licensed Dealer | Repair Shop (Selling Lien Car) |
|---|
| Legal Authority | Holds a DMV-issued dealer license. | Operates under a specific mechanical lien statute. |
| Vehicle History | Often provides a vehicle history report. | History may be unknown or incomplete. |
| Warranty | May offer a limited warranty (e.g., 30-day). | Almost always sold "AS-IS" with no warranty. |
| Title Status | Provides a clear title at sale. | Title process can be delayed pending lien clearance. |
| Consumer Protection | Subject to California's "Lemon Law" for dealers. | Not covered by the same lemon law protections. |
| Typical Inventory | Wide variety from multiple sources. | Limited to specific, often neglected, abandoned vehicles. |
In short, while a California repair shop can sell a car, it is an exception to their primary business and is governed by niche regulations designed for disposing of unclaimed property, not for regular retail sales. For a business that primarily wants to sell cars, obtaining a dealer license is the necessary and legal path.
