California Motor Vehicle Dealer Bonds
California Motor Vehicle Dealer Bond Information
The California Department of Motor Vehicles requires dealers to post a dealer surety bond (Surety Bond of Dealer OL 25 or OL 25B) as part of the licensing process in order to conduct business in the state. The bond amounts (or penalty) are as follows:
- $50,000 for car dealers
- $10,000 for motorcycle dealers and all-terrain vehicle (ATV) dealers
- $10,000 for wholesale-only dealers (less than 25 vehicles per year)
How Much Does a Dealer Bond Cost in California?
What Does a Dealer Bond Protect Against?
The California dealer surety bond obligates the dealer (principal) to refrain from fraud, or any fraudulent practices or representation that results in monetary loss to a purchaser, seller, financing agency or governmental agency. Additionally, the dealer must comply with all conditions as defined in section 11711 of the Vehicle Code. In the event of damages resulting from the dealer’s non-compliance with bond terms, the surety is bound to cover losses for harmed parties up to the full penalty of the bond.
Getting Your California Business License or Registration
The following is an overview of key California motor vehicle dealer licensing requirements.
- OL 248A, New Dealer Application Check List or OL 248B, Used Dealer, Dealer-Wholesale Only, and Autobroker 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 or OL 25B, Surety Bond of Motorcycle Dealer, Motorcycle Lessor-Retailer, All-Terrain Vehicle Dealer, or Wholesale-Only Dealer (Less Than 25 Vehicles Per Year) or OL 25E, Deposit Agreement and Assignment (PDF)
- OL 53, Authorization to Release Financial Information
- OL 124, Certificate of Proposed Franchise (new automobile, commercial, motorcycle, all-terrain vehicle, motorhome, and recreational trailer dealers only)
- OL 902, Property Use Verification for Vehicle Dealer's License OL29B, Application for Occupational License Personal History Questionnaire, Part B, Business Licensing Unit (Required for each person listed under ownership on form OL 12)
- ADM 9050, Appointment of Director as Agent for Service of Process
- Additional items may be needed and exact requirements may vary based on applicant, license type or obligee discretion. Please see obligee and state links in the Other Helpful Information and Links section below or contact the obligee directly for more information.
Other Helpful Information and Links
Once received from Surety Bonds Direct, auto dealers are to submit the original signed and sealed bond form to their local Occupational Licensing Inspections Office. The California Department of Motor Vehicles can be reached at (800) 777-0133.