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How much does an auto dealer bond cost in California?
The cost of a California auto dealer bond depends on the type of license for which you are applying. However, highly qualified applicants are typically approved for just 1-3% of the total bond amount.
Even if you don’t qualify for the lowest rate, SuretyBonds.com works with several of the largest surety providers in the country, meaning we shop until we are certain we have obtained the lowest available rate.
Please note that this page is for vehicle dealer licensing. Click here for information regarding a California motor vehicle bond for title.
Watch the video below to learn more about the bonding process, including application, pricing, and document issuance!
We can provide your free, no-obligation surety bond quote within one business day of submitting your application. Call 1 (800) 308-4358 or click here to get started!
Why do I need a surety bond to sell cars and other vehicles?
The California Department of Motor Vehicles requires motor vehicle dealers to post surety bonds prior to conducting business within the state. The required bond amount depends on the type of license needed:
- Motorcycle dealers, motorcycle lessor-retailers, ATV dealers and wholesale-only dealers (Less than 25 vehicles/year) = $10,000 surety bond
- New motor vehicle dealers (25 or more vehicles/year) = $50,000 surety bond
By posting a California auto dealer surety bond, principals (dealers) guarantee to the Department of Motor Vehicles that they will conduct business in compliance with all conditions listed in section 11711, which is also referred to as the Vehicle Code.
If the principal fails to comply with these terms, the surety will cover damages to harmed parties up to the full penal sum of the bond, and the principal must reimburse the surety for all damages paid out.
Purchasing the California auto dealer bond you need is fast and easy when you work with the experts at SuretyBonds.com! Request your free bond quote now.
What kind of motor vehicle dealer does my business classify as?
California defines vehicle dealers as any business that sells new or used vehicles. Lessor-retailers are businesses that sell previously leased or rented vehicles and wholesalers are businesses that are only involved in the sale of vehicles between licensed motor vehicle dealers.
Based on the state of California’s guidelines, general motor vehicle dealers are required to have a larger surety bond than motorcycle dealers, motorcycle lessor-retailers, all-terrain vehicle dealers, or wholesale-only dealers.
How to become a motor vehicle dealer in California
To become a licensed motor vehicle dealer in California, applicants must complete and submit the following forms:
- OL 248A New Dealer Application Check List OR OL 248B Used, Dealer, Dealer-Wholesale Only, and Auto broker Application Check List
- OL 12 Application for Original Occupational License, (Part C)
- OL 21A Original Application for Occupational License, (Part A)
- OL 25 Surety Bond of Dealer
- OL 53 Authorization to Release Financial Information
- OL 124 Certificate of Proposed Franchise
- OL 902 Property Use Verification for Vehicle Dealer’s License
The following fees must also be paid by the applicant prior to receiving a license:
- $175 nonrefundable original application fee
- $1 Family Support Program fee
- $100 Auto broker fee
- $70 per branch location
- $300 New Motor Vehicle Board Fee
- $70 per dealer plate
- $72 per motorcycle plate
More information about auto dealer bonds
Auto dealer bonds in California are issued to run concurrently with the dealer’s license. They must be renewed annually for as long as the vehicle dealer wishes to continue operating within the state.
The surety has the right to cancel the bond for any reason with 30 days’ notice, pursuant to the California Code of Civil Procedure.