California Auto Dealer Bond Guide | Your Car Dealer Bond LLC

Who Needs an Auto Dealer Bond in California?

All types of vehicle dealers in California need to get an auto dealer bond before starting operations in the state. This is required by the Department of Motor Vehicles.

This means you’ll need a California DMV dealer bond if you’re a:

New car dealer
Used car dealer
Wholesale car dealer
Retail car dealer
Motorcycle dealer
All-terrain vehicle dealer

How Much Does the Bond Cost?

The cost of your dealer bond depends on the strength of your personal and business finances. Keep in mind that your credit score is the main factor in determining the price. The cost also depends on whether you are obtaining a bond for one or two years, as this type of bond can be issued for a two-year period.

The actual price of your bond is a fraction of the required bond amounts. In the case of California dealer bonds, they are $10,000 or $50,000, depending on the license type.

How much do you have to pay for a California dealer bond? Check out the table below for a quick reference.

California Auto Dealer Bond Cost Table
State and Dealer Type	Bond Amount	Starting Price
California retail vehicle dealers including: - New and Used vehicle dealers - Wholesale vehicle dealers selling more than 25 vehicles per year	$50,000	$500
- California motorcycle dealers - California all-terrain dealers - Wholesale dealers selling less than 25 vehicles per year	$10,000	$100

Can You Get Bonded with Bad Credit?

Yes, you can. However, it’s more difficult to obtain a California motor vehicle surety bond if your finances are not in top shape. Your credit score is among the most important criteria for setting your bond cost.

We aim to offer bonding options to dealers even if they’re having financial difficulties. We’re a close-knit family business that wants to support dealers on their way to success.

What Does the Bond Guarantee?

Your dealer bond ensures you will follow the law in your operations as a car dealer in California.

This means it protects your customers from:

Fraudulent sales and financing practices
Not adhering to warranties
Problems with title transfer
Skipping on other licensing criteria you have to fulfill as a dealer

The bond works as a safety net that you as the principal will stick to your legal obligations, as set by the obligee (the licensing authority). This is guaranteed by the surety which backs your business.

How to Get a California Auto Dealer Bond?

You can get your California auto dealer surety bond by following our simple step-by-step process:

Fill out our 5-minute application process online
We at YCDB will send you a free quote in a couple of business hours (max 8)
Purchase your bond straight away

We can issue your auto dealer bond the same day if all necessary documents and payments are received. Our proprietary process involves various methods to help speed things up just for you, so YCDB makes things super easy for you. This is the key reason we are one of the fastest local, family-owned surety bond services in California!

Licensing Requirements for California Auto Dealers

Getting a DMV dealer license in California is a rigorous process.

You’ll need to go through a couple of administrative procedures and get a bunch of documents, including:

Business entity registration
Completed training course
Proof of passing the DMV exam
Business location paperwork

For further information, you can check our guide on flipping cars in California.

FAQs about Auto Dealer Bonds in California

How exactly does an auto dealer surety bond protect my dealership?

The protection that a surety bond provides is for your customers and partners, not for your business. It’s meant to safeguard the interests of the general public, other car dealers, and the lenders that provide financing for inventory.

As a California wholesale-only dealer, does it matter how many vehicles I buy per year?

No. The DMV is tracking the number of sales transactions to determine your car dealer bond limit. The number of cars you purchase is not factored in. That said, if you are buying too many cars and not selling them, eventually the California Department of Tax and Fee Administration (CDTFA) may start poking around. The reason is that vehicles you purchase as a wholesale dealer typically generate a taxable profit. If that vehicle was never sold, the CDTFA would never get to collect a tax on the profit you made on the auto sale.

Can I get a car dealer license without a physical lot?

An auto broker endorsement used to be the way to do that in California. However, the DMV is trying to eliminate this specific license type. That said, the auto broker business model is still alive and well! They still need to obtain a $50K auto dealer bond, though.

I'm just getting a California wholesale car dealer license. What bond limit do I need?

The California DMV has a very specific carve-out in the law for wholesale-only auto dealers. The exception is meant to offer low-volume wholesale dealers the opportunity to get lower-limit auto dealer bonds. Wholesale dealers who sell less than 25 cars or trucks per year can get away with the $10K surety bond. The only other carve-out exists for motorcycle-only dealers, regardless of retail or wholesale. Motorcycle-only dealers also have no sales caps to still qualify for the $10K bond.

What bond limit do I need for a California retail auto dealer license?

Since the only carve-out in the California DMV law is for motorcycle-only dealers, you will need a $50K auto dealer bond if you are getting a license to sell vehicles directly to the public. Retail truck, trailer, RV, and boat dealers all need a $50K surety bond.

Who We Are

Your Car Dealer Bond (YCDB) was founded in 2011 as a premium Surety Bond Agency in Fremont, California by Mike Ramos. Since this time, YCDB established headquarters in Fresno with production offices in Bakersfield and Corona. YCDB is a local family-operated company that has grown steadily since its inception.

YCDB has issued over 10,000 bonds in California. Our experience in the used car dealer field for over two decades validates YCDB’s ideal balance of professionalism, competitive pricing, and proficiency.

California Auto Dealer Bond