California Auto Dealer Bonds
For Used, Independent and New Dealers.
The DMV won't issue or renew a dealer license without a surety bond: $50,000 for most dealers, $10,000 for small wholesale and motorcycle dealers. We quote your bond with several sureties, so you're not stuck with the first price you're offered, and we get the name and DBA right the first time.
- Getting your first dealer license? We work with new dealers every day.
- Paying too much at renewal? Switching sureties is simple.
- Price is set mainly by your credit and experience, and we shop both.
Get a Dealer Bond Quote
An agent will call you with your price.
Which California Dealer Bond Do You Need?
| Dealer type | Bond amount | DMV form | Law |
|---|---|---|---|
| Used and new car dealers (retail) | $50,000 | OL 25 | VC § 11710 |
| Wholesale-only dealers, 25 or more vehicles a year | $50,000 | OL 25 | VC § 11710 |
| Wholesale-only dealers, fewer than 25 vehicles a year | $10,000 | OL 25B | VC § 11710.1 |
| Motorcycle or all-terrain vehicle dealers only | $10,000 | OL 25B | VC § 11710 |
Not sure which license you're applying for? Tell us how you plan to sell, retail or wholesale-only and roughly how many vehicles a year, and we'll confirm the bond before it's issued. Lessor-retailers and other occupational licensees need bonds too; ask us.
Dealers We Work With
Used and independent dealers
Independent lots don't have a manufacturer's program behind them, so the bond price matters. We compare sureties at every renewal, and switching is simple: the new bond is filed with the DMV before the old one ends.
New dealers getting licensed
Your first dealer license comes with a stack of DMV forms. We'll explain which bond your license type needs, make sure the bond matches your application exactly, and get it to you so the bond isn't what holds up your license.
Wholesale-only dealers
Selling only to other dealers? If you sell fewer than 25 vehicles a year, California lets you post a $10,000 bond instead of $50,000. If your volume grows past that, we'll move you to the full bond.
Motorcycle and ATV dealers
Dealers who sell only motorcycles or all-terrain vehicles post a $10,000 bond on the DMV's OL 25B. Add a car to the lot and the $50,000 bond applies, so tell us what you sell.
What Sets the Cost of a Dealer Bond
The biggest factor. The surety is guaranteeing that you'll deal honestly and repay any claim, so it looks at the owners' credit history. Strong credit gets the lowest rates.
Years as a dealer, or managing one, count in your favour. A first-time dealer can still be bonded, usually at a higher rate that comes down at later renewals.
A clean record with the DMV and no past bond claims help. Some sureties also ask about the business's finances for newer or larger dealers.
Sureties price the same dealer differently. That's why we quote with several: the difference can be significant, especially for dealers who aren't a perfect fit for one company.
Getting Your Bond to the DMV
- Decide on your license type: retail, wholesale-only, or motorcycle and ATV.
- Request your quote with the dealership's legal name and DBA exactly as on your DMV application.
- Approve the quote; the surety issues the bond on the DMV's form (OL 25 or OL 25B).
- Submit the bond with your dealer license application packet.
- Keep it in force. California requires the bond to stay at full value for as long as you're licensed, and it must be current at every renewal.
Running a lot means more than a bond. We also write business insurance for dealerships, from liability to your building and office.
(916) 576-4000California Dealer Bonds — Frequently Asked Questions
How much is the California auto dealer bond?
$50,000 for most dealers, under Vehicle Code section 11710. It is $10,000 for a dealer that deals only in motorcycles or all-terrain vehicles, and for a wholesale-only dealer that sells fewer than 25 vehicles a year (Vehicle Code section 11710.1). The DMV's form is the OL 25 for the $50,000 bond and the OL 25B for the $10,000 bonds.
How much does a $50,000 dealer bond cost?
You don't pay $50,000. You pay a yearly premium that is a percentage of the bond amount, set by the surety company mainly from your personal credit and your experience in the car business. Dealers with strong credit and a few years in the business get the lowest rates. Because we quote with several sureties, we can tell you what your real price is rather than a range.
Can I get a dealer bond as a new dealer, or with credit problems?
Usually, yes. Sureties write bonds for first-time dealers and for applicants with weaker credit, though the premium is higher and some ask for more information about your experience and finances. Applying through an agent who works with more than one surety gives you the best chance of an approval at a fair price.
What does the dealer bond actually cover?
It protects the people you do business with, not your dealership. Under Vehicle Code section 11710, purchasers, sellers, financing agencies and government agencies that lose money through a dealer's fraud or fraudulent representation can claim against the bond. If the surety pays a claim, you are required to pay the surety back, so the bond is a guarantee rather than insurance for you.
What does the DMV need to see on the bond?
The bond goes on the DMV's own form (OL 25 or OL 25B), issued by an admitted surety insurer, with the principal's name and any DBA exactly as they appear on your dealer license application. A bond issued in a different name will be rejected, so check the spelling with us before it's issued. The bond has to be in place before the DMV issues or renews your license.
Can I post a cash deposit instead of a bond?
Yes, the DMV accepts a deposit in place of the surety bond, using its Deposit Agreement and Assignment form (OL 25E). Most dealers choose a bond instead so they don't tie up $10,000 or $50,000 in cash for as long as they're licensed.
Need a different bond? See our court, probate and other surety bonds.