California Auto Dealer Bond

To become an auto dealer in California, you must have an auto dealer bond. This surety bond is a licensing requirement and is also commonly referred to as a California motor vehicle dealer bond or California dealer bond. 

A California auto dealer bond ensures that auto dealers are financially liable for unethical or fraudulent activity. In the event that a dealer’s misconduct causes a customer harm, their bond covers the affected individual’s financial losses.

A California auto dealer bond costs as little as $100. The cost is a small percentage (generally 1% – 5%) of the total bond amount required. 

This cost is commonly referred to as a “bond rate” or “bond premium.” An applicant's credit score heavily determines the bond rate that they qualify for. 

1. Apply for a California Auto Dealer Bond

There are two main ways to get a fast, free quote for your auto dealer bond:

• Apply online: Fill out our online application to get an instant bond quote. This method is available 24/7 and is the fastest way to get bonded.
• Call us: Talk directly to a surety expert at (888) 592-6631. This method is best if you have any questions about the bonding process. 

You should have the following information on hand: the bond you need, the bond amount, your business address, and your dealer license number (if available).

2. Sign the Paperwork & Pay Your Invoice

A bond quote will be sent your way through email. If you are satisfied with your quote, log into our website to sign the required documents and pay your invoice. 

3. Get Your Bond

Once payment is confirmed, you will receive an email with a copy of your bond. Double-check that all information on it is correct.

The California Department of Motor Vehicles requires all licensed vehicle dealers in CA to have a surety bond. Which surety bond a dealer needs depends on what they sell and their business operations.

• $50,000 California Auto Dealer Bond (form OL 25) – for new and used retail auto dealers or wholesale-only dealers who sell 25 vehicles per year or more.
• $10,000 California Vehicle Verifier Surety Bond (form OL 25B) – for motorcycle dealers, motorcycle lessor-retailers, all-terrain vehicle dealers, or wholesale-only dealers who sell less than 25 vehicles per year.

All auto dealer bonds have a term stated directly on the form. You must renew your bond before this date. 

The surety company that issued your bond should contact you 30 – 90 days before the bond’s expiry date with renewal instructions. However, it is ultimately your responsibility to ensure that your bond stays active. If you fail to do so, you may experience license cancellation or financial penalties.

If someone files a claim against your California surety bond, an investigation process will begin. 

This investigation is for your benefit—to ensure you aren’t paying for false claims. During this time, you may be asked to provide supplementary information. If the claim is deemed valid, the surety will initially pay, but it is then your responsibility to reimburse them. 

See our Guide to Surety Bond Claims for more information. 

To get a California auto dealer license, you must apply through the California DMV. To successfully do so, you will need:

• A pre-licensing dealer training certificate (wholesale dealers only).
• A permanent business location that meets zoning and law requirements.
• Business registration through the California Secretary of State. 
• A complete application with business location photos, fingerprinting, and ID.
• A California auto dealer bond.
• To schedule a place of business inspection.

Requirements may vary depending on the type of dealer license you are applying for. The DMV offers all the required forms and application checklists online.

Visit our in-depth California Auto Dealer License Guide for more details.