A California motor vehicle dealer bond is required by state statute for all parties that wish to engage in the retail sale of automobiles in the state. There are limited exemptions to the licensing requirement and there is a partial exemption for wholesale and motor cycle dealers. The surety bond must be issued in the amount of $50,000 and guarantees that the dealer will not commit fraud or make any fraudulent representation which will cause a monetary loss to a purchaser, seller, financing agency, or governmental agency, and comply fully with the conditions set out in Section 11711 of the California Code.
Dealers are also subject to Board of Equalization rules and a may be required to provide a Board of Equalization tax bond. Pursuant to Revenue and Taxation Code, Section 6066 and 6067, "All licensees selling vehicles or vessels, retail or wholesale, are required to file an application for a Seller's Permit. The purpose of the permit is to enable the licensee to collect taxes on sales. There is no fee for the permit, but a deposit or surety bond in lieu of deposit may be required. Applications can be made through your local Board of Equalization office. A copy of this permit is required as part of the application for a dealer and lessor-retail license. The Department may automatically cancel a dealer or lessor-retail license for failure to maintain a valid seller's permit."
The DMV recommends that all dealers be fluent in the laws and standards of practice in California. You may download a California Motor Vehicle Dealer Handbook here.
California surety bond leader, Surety One, Inc. is available for same-day support of your new or renewal dealer bond request. Our special programs allow us to offer you bonding regardless of credit condition. Do you operate in multiple states? No problem! We offer motor vehicle dealer bonds in ALL of them. (Click here for our MVD bond guide.) We also offer certificate of title bonds and lien release bonds needed in the course of your dealership operations.
Surety bond application review and quoting are free of charge. There is no obligation to purchase.