California DMV Bond



Summary

California MVD bonds, also known as California Motor Vehicle Dealer Bonds, are types of surety bonds required by the California Department of Motor Vehicles for individuals or businesses who want to become licensed motor vehicle dealers in the state. The bond provides a financial guarantee that the dealer will comply with state laws and regulations governing the sale of motor vehicles, and will pay any necessary taxes and fees to the state. If the dealer fails to meet these obligations, the bond can be used to compensate any affected parties, such as customers or the state government. The required bond amount may vary depending on the specific license and dealership type, and must be obtained from a licensed surety bond provider.

What is a California Dealer Bond? 

California Car Dealer Bonds are required by The Motor Vehicle Department "MVD" to obtain your Dealer license. The MVD Bond amount for the sale of New and used vehicles is set at $50,000. For Wholesale Dealers the bond is $10,000.  The Auto Dealer bond ensures that the principal shall comply with the conditions of any contract made by such licensee in connection with the sale or exchange of any motor vehicle and shall not violate any of the provisions of law relating to the conduct of the business for which it is licensed.

The State requires a Different Car Dealer bond for each license you hold:  

- $50,000 New and Used Vehicle Dealer Bond   $50,000 CA MVD Bond APP

- $10,000 Wholesale Dealer Bond  (Instant Issue No Credit Check) $10,000 Wholesale Dealer bond APP No Credit Check

Different parts of a bond:

There are 3 parts to a MVD surety bond. The Principal "YOU", The Surety Company, and the Obligee. The Principal is the business or individual applying for the MVD Surety Bond. The Obligee  is the individual or entity requiring the Surety Bond and the Surety Company is the company who provides the Surety Bond coverage.

Program:

We have several exclusive programs for these bonds. You can get an instant approval for most cases and buy you bond right after the application. 

The below information is what the state will require in addition to the bond.

Use these resources to help you apply for your vehicle dealer license:

If you deal new vehicles, complete all forms in the New Dealer Applications Forms Packet (OL 248N).

If you deal used vehicles (dealer-wholesale only), complete all forms in the Used Dealer Applications Forms Packet (OL 248U).

Live scan fingerprint and Request for Live Scan Clearance (receipt) (DMV 8016) for each person listed under ownership on the Application for Original Occupational License (OL 12).

Fingerprint card (ADM 1316) (out-of-state applicants only). Fingerprint cards may be obtained by calling Occupational Licensing (OL) at (916) 229-3126 or from a DMV inspector office.

You may also need:

Certificate of Completion, Dealer Education Program (used vehicle dealers and wholesale-only dealers).

Proof of successfully passing the used dealer test administered by DMV (used vehicle dealers and wholesale-only dealers).

Each applicant may make 3 attempts to pass the test. If an applicant fails the test, they must pay a $16 fee and wait one week to re-test. After the third attempt, if the applicant does not pass, they must take the dealer education program again and the testing process starts over with another 3 attempts.

Letter of Authorization (New trailer dealers only. Required for each line).

Statement of Information (SI 550) or Statement of Information LLC (LLC 12) filed with the Secretary of State (corporation, limited liability company, or limited liability partnership owned businesses only).

Copy of California Department of Tax and Fee Administration (CDTFA) Resale Permit (enables you to collect sales tax).

Photographs of the business location (refer to OL photography requirements).

Collect your paperwork and fees.

Once you have completed these forms and collected all documents, make an appointment with an OL inspector. The OL inspector will:

Inspect the main business office where you conduct business.

The office of the principal place of business and each location of the dealership must be established to the extent that its construction is not temporary, transitory, or mobile in nature (a trailer coach office is acceptable if it is not part of the dealer’s vehicle inventory for sale while it is being used as an office and otherwise meets the requirements of the California Vehicle Code [CVC]). The place of business is a place actually occupied either continuously or at regular periods by the dealer.

Inspect all books and records pertinent to the business.

Inspect the display area (not required if wholesale only). Show Citation 11

The display area of the principal place of business must be of sufficient size to physically accommodate vehicles of a type for which the dealership is licensed to sell.

The display area must be clearly for the exclusive use of the dealer for display purposes only.

Additional display areas are permitted within a radius of 1,000 feet from the principal place of business and any licensed branch location without being subject to separate licensing. However, such display areas must also meet the signing requirement as identified in CVC §§11709 (a). Title 13, 270.08, 270.08 (a) and 270.08 (b).

Inspect signs (not required if wholesale only dealer).

Signs must be of a permanent nature, erected on the exterior of the office or on the display area, and be constructed or painted and maintained so as to withstand reasonable climatic effects and be readable as provided for in CVC §§ 11709. CCR, Title 13, 270.06.

A temporary sign or device may suffice when a permanent sign is on order. Evidence of such order must be submitted to DMV prior to issuance of a temporary permit or license. Show Citation 22

Fees for the State:

$175 non-refundable application fee

$1 family support program fee

$70 fee for each branch location (if applicable)

$88 fee for each dealer plate (plus county fees, if applicable)

$90 fee for each motorcycle plate (plus county fees, if applicable)

This figure will vary depending on the county where your business is located

Dealer plates are not required

$300 new motor vehicle board fee, per location (new automobile, commercial, motorcycle, ATV, motorhome, and recreational trailer dealers only)

$100 autobroker endorsement fee

$42 fee for each person submitting ADM 1316 Fingerprint Card (out-of-state applicants only)

$16 examination fee

Application Checklist

Take a look at the applicable checklist to make sure you completed all the application steps:

New Dealer Application Check List OL (248A).

Used Dealer or Dealer Wholesale Only Application Checklist (OL 248B).

How to Renew a Vehicle Dealer License. To renew your license, complete and submit the following:

Proof of continuing education (required every two years).

Renewal Application (OL 45).

$50,000 Bond Exemption Application (OL 56) (wholesale-only dealers, if applicable).

Report Or Replace Lost, Stolen, Or Surrendered Occupational License Special Plates (OL 247) (required if not renewing all plates).

Continuing Education Exemption Application (OL 257) (wholesale-only dealers, if applicable).

Mail your application and fees to the address on form OL 45.

Fees:

$125 renewal application fee

$1 family support program fee

$88 fee for each dealer plate (plus county fees, if applicable)

$90 fee for each motorcycle plate (plus county fees, if applicable)

$300 new motor vehicle board fee, per location (new automobile, commercial, motorcycle, ATV, motorhome, and recreational trailer dealers only)

$75 autobroker endorsement fee

How to Modify a Vehicle Dealer License:

To modify an existing license, complete and submit the relevant form(s):

Ownership changes

All other changes

Mail your completed form and fees to your local OL inspector.

Fees

$70 name change fee

$70 address change fee

$70 add a branch fee

$70 officer change fee