DLR License Plate – What Does It Mean? 

If you drive in a state like California, you might see somebody driving with a non-standard license plate. Usually, the standard one goes by xABCxxx, where “x” stands for numbers and “ABC” stands for letters. But, others may have the letters “DLR” stamped vertically on the plate, so what does it exactly mean?

The letters “DLR” on a license plate stand for “Dealer.” This means you have the legal right to sell cars and to drive a car without a plate as long as you use this portable ‘dealer’ plate.

Read on to learn more about the rightful use of the DLR plate and who can and can’t use it.

DLR License Plate

dlr license plate

As mentioned earlier, the initials “DLR” stands for “Dealer,” and this license plate is mainly used in California. As long as you use this portable DLR plate, you may sell a car and drive them without needing a conventional license plate.

Once you get this license from the DMV, you should also save the registration card. Or, you can keep a facsimile copy of the registration card while driving.

DLR plates are usually granted to both retail and wholesale dealers. If you want to replace one or order another, you must complete a DMV form “OL22.”

So, Who Can Use the DLR License Plate?

(a) A sole owner, general partner, limited liability company manager, corporate officer, or director of a dealer who actively manages and controls the dealer’s commercial operations.

(b) A business manager, general manager, or sales manager engaged in managing and controlling the dealer’s business activities where no other individual meets the criteria we laid out in (a) above.

(c) A driver if one of the people we listed above in (b) is also in the car.

(d) An unaccompanied adult who lives in the same home as those we listed in (b) to pick them up.

How to Properly Use California Dealer Plates

Must Be a Licensed Driver

Generally speaking, you can’t place a dealer plate on your car. Your dealer’s inventory must have the vehicle available for purchase. You may only drive a car with a DLR plate if you are a licensed driver.

Secure a Letter of Authorization

Any licensed driver may use a car with DLR plates for special reasons if they have a letter of authorization. Now, the letter will have to identify the vehicle, the length, and the location of the operation. It also has to identify the person(s) allowed to run the vehicle.

Required to Have a Letter from the Dealer

Furthermore, if you are a licensed driver, you can test drive a car with a DLR plate for seven days. A salesperson doesn’t need to be present in this case. But, you will need a letter from the dealer describing the location and duration of the operation.

An Employee of a Dealer

If you are an employee of a dealer who operates commercial vehicles as part of your job, you can test drive a car with a DLR plate.

Lawful Use of the DLR License Plate in California

May Be Used on Vehicles Operated by the Dealer

Dealer plates may be used on vehicles operated by the dealer during the dealer’s business. If you are a retail dealer, you can use a DLR plate basically on a full-time basis.

Potential Buyer May Use the Vehicle for No More than 96 Hours

A dealer plate may be used for no more than 96 hours on a vehicle in possession of a potential purchaser when they get a letter of authorization from the dealer.

Licensed Salesman Can Use a DLR Plate on a Vehicle to Promote a Vehicle

Furthermore, if you are a licensed salesman, you can use a DLR plate on a vehicle to promote that vehicle to potential buyers.

Other Employees Can Test a Vehicle’s Mechanical Operation

When testing the mechanical operation of a vehicle, other employees not licensed as vehicle salesmen can also use DLR plates.

As long as the power unit is adequately licensed, you can use a DLR plate on a laden trailer.

Bring an ID When You Operate a Vehicle with a DLR Plate

Do not forget that you should always carry identification when operating a vehicle with a DLR plate. Dealers usually issue an identification card to each licensed salesperson, manufacturer, or dealer.

Other Special Requirements

When driving a car with dealer plates, there are specific requirements that you should meet. For instance, the salesman’s sponsoring dealership must be the same as the one listed on the dealer plate. You should also carry a liability insurance card.

Furthermore, each non-licensed employee who operates a vehicle with a dealer plate must have an identification card from the dealership.

Unlawful Use of the DLR License Plate

At least one of the following will constitute an unlawful use of your California dealer license plate:

  1. On work and service vehicles that are not available for purchase.
  2. On cars rented or leased by the licensed dealer.
  3. On heavy trucks meant for cargo transportation, especially when they have violated Idaho Code 49-434 (Mileage Tax). However, this does not include dealer inventory transportation. 
  4. Sold car.
  5. Cars used in collaboration with another company.

Can You Sell, Lend, Rent or Reassign a DLR License Plate?

dlr number plate

DLR Plates Are a Registrar’s Property

By law, all general registration plates issued by the registrar, including DLR license plates, must remain the registrar’s property.

Non-Transferable

They are also non-transferable. The registrar may take action, which would involve revoking the registration, among other things.

Against the Law to Loan, Rent, Sell, Lease, or Reassign a Dealer Plate

Any attempt to loan, rent, sell, lease, or reassign a dealer plate is against the law. Otherwise, the registrar may deem your DLR plate void, and they have the authority to take it away from you.

Illegal to Sell a DLR Plate on Any Website

Attempting to sell or rent a DLR plate on any Internet website is illegal. If you put DLR plates on vehicles that have nothing to do with a dealer, such vehicles will be uninsured. Plus, you won’t be able to register them anyway.

Owner May Face Charges for Illegally Placing a License Plate on the Site

Moreover, that vehicle will also be towed. And, the real owner may face charges for illegally placing a license plate on it, which is a crime. Even more so, the driver may face charges for avoiding vehicle registration.

Registrar Will Evaluate Whether the Dealer Illegally Issued the DLR Plate

The registrar will evaluate whether the dealer knowingly issued the DLR plate to an illegal person. They will also examine whether any action against the dealer is necessary in such a case.

If the registrar believes that a dealer has unjustly provided a plate to another person, the registrar will eventually cancel the dealer’s general registration.

Do You Have to Return DLR Plates If the Dealership Is Terminated

The registrar will provide DLR plates to a specific applicant who meets the requirements for such a plate. Once issued, these DLR plates are not part of the dealership’s assets, so a successor can’t use them.

Suppose the dealership business ceases to operate or the issuing authority revokes any applicable license. The dealer must return all issued DLR plates when one of the following cases happens:

  • End of the business,
  • Before a new owner takes over, or
  • Suspended or revoked DLR license plate.

If a dealer fails to return and account for all DLR plates, the registrar may refuse to issue that person any future general registration.

Again, what does a DLR license plate mean? DLR on a license plate means “Dealer.” By using this portable license plate, you’ll have the right to drive without having a plate.

Can an Independent Contractor Use DLR Plates for Personal Use

An Independent Contractor Should Not Use DLR Plates for Personal Reason

Is it right for an independent contractor who provides services to a motor vehicle dealer to use a dealer-owned inventory car with a DLR plate for personal reasons? The answer is no. 

Every Section Five General Registration Plate issued to a “motor vehicle dealer” is subject to excise duty under Massachusetts General Laws Chapter 60A. The law also allows employees in specified roles at the dealership to “personalize” inventory automobiles.

The owner, spouse of the dealership, and “employees” are included here. But, these employees must provide at least 20 hours of service to such dealers every week.

An Employee of the Dealer Must Be Able to Present Proof of Employment

A “motor vehicle” dealer who distributes a DLR plate to an inventory vehicle for the “personal use” of an individual who claims to be an “employee” of the dealer must be able to present paperwork proving the individual’s whole employment history with the dealer.

This, of course, includes any vehicles sold, payroll, timesheets, and tax records.

The law does not permit “personal usage” by other dealership “employees” (such as “service” or “office” staff). It also does not apply to a “non-motor vehicle dealer” who has the right to display DLR plates.

Independent Contractors Are Not Considered “Employees”

As such, independent contractors are not “employees.”

The RMV believes that a dealer who labels a person providing services to the dealer as an “independent contractor” and allows that person to use a vehicle from inventory for personal use is violating M.G.L. c. 60A, one and misusing the DLR plate in violation of M.G.L. c.90, 5 and the Regulations at 540 CMR 18. 

Registrar Has the Power to Cancel the Dealer’s General Registration

The registrar can suspend or cancel the dealer’s general registration in such a case. They can also revoke any DLR plates issued under the general registration.

How to Get a DLR License Plate

dlr meaning in car license plate

1. Find Out the Type of DLR License You Need

New DLR License

With this one, you’ll be able to sell new and used vehicles to any licensed motor vehicle dealer, the general public, and at auction.

Used DLR License

This one allows you to only sell used cars to licensed car dealers and the general public.

Wholesale DLR License

You can only sell to licensed dealers at auction with a wholesale dealer license. Now, you can’t use this one to sell to the general public.

Auto Broker Endorsement 

This is a supplement to a brand new, used, or wholesale license.

2. Participate in a Dealer Education Program

You must complete a 6-hour pre-licensing training program from an approved dealer education provider. You can find many dealer education programs taught online. But, you must pass an in-person test at a California DMV after completing them.

The test consists of 40 multiple-choice questions, and passing requires a score of 70%. You have three chances to pass and must wait a week between each sitting.

3. Obtain a Long-Term Business Address

Your business location must:

  • Have an office with direct access from the street, complete with a desk, filing cabinet, and phone, where you may keep all of your company’s records.
  • Obtain zoning and property use verification to ensure that the business site conforms with all the requirements.
  • Display a sign at least 2 square feet in size that complies with all California Vehicle Codes (CVC).
  • Meet the CVC car dealer handbook’s minimum display area size criteria.

4. Obtain the Necessary Permits/Licenses 

You may need the following:

  • Auto Repair Dealer License: If you want to run a repair shop, you’ll need to register with your local Bureau of Automotive Repair (BAR).
  • Fictitious Name License: This one is for businesses that operate under a name different from the owner’s real name.

5. Get an Auto Dealer Bond

All dealers must pay a dealer surety bond before they get licensed. Why do you need such a thing? A dealer surety bond ensures that you will meet your responsibilities as an auto dealer.

It is a type of insurance that can safeguard the public and the state of California. It’s beneficial when you fail to pay your fees or remit your sales tax.

6. Arrange for a Business Inspection to Take Place

Make an appointment with an Occupational Licensing inspector once you’ve completed and gathered all relevant documentation and licenses. The inspector will inspect your business, including the office, books and records, display space, and signage.

7. Submit Your Application and Fees 

Now you can submit all papers, documentation, and payments to your Local Occupational Licensing Inspections Office.

Conclusion – DLR Meaning on a License Plate 

Now you know that DLR stands for “Dealer.” A license plate with DLR will allow you to sell cars and drive without using the standard license plate used in California.

Of course, you can’t rent, sell, lease, or reassign this DLR plate to a third party. Otherwise, the registrar may act against you and eventually remove it altogether.

Do not forget that once you get this DLR plate from the DMV, you should always have some identification to prove that you are eligible for the license plate.

Read next:

Fleet Vehicle License Plates in the Different U.S. States

What Is a Vehicle Tag Number?

How to Transfer License Plate to New Car