California Auto Dealer Bond

California Auto Dealer Bond

California motor vehicle dealers must file a surety bond with the California Department of Motor Vehicles to be licensed. A $50,000 bond is required for new and used vehicle dealers and lessor-retailers, while wholesale and motorcycle dealers need a $10,000 bond.

You can get a quote and purchase your bond in minutes!

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Jet Insurance Company provides this bond directly to the dealer without brokers and agents, meaning dealers can save hundreds on their bond.

Whether you are a lessor-retailer, or a used, franchise, wholesale, or motorcycle dealer, the California DMV Occupational License Division requires a vehicle dealership to have a surety bond as a financial guarantee to protect consumers from damages arising from negligent or fraudulent dealer behavior.

How Much Does a California Motor Vehicle Dealer Bond Cost?

The $50,000 Auto Dealer Bond for used and new dealers starts at $38 a month or $375 for one year. The $10,000 bond for wholesalers or motorcycle dealers starts at $10 a month or $100 for one year. Multi-year terms are available for all bonds at a discount.

Bond TypeMonthly1 Year2 Year
$50,000 Used/New Dealer$38$375$656
$10,000 Wholesale/Motorcycle Dealer$10$100$175
California Motor Vehicle Dealer Bond Cost

For businesses operating with a California lessor-retailer license, the preferred rates are as shown below in the chart. 

Bond TypeMonthly1 Year2 Year
$50,000 Lessor-Retailer$38$375$656
California Lessor-Retailer Bond Cost

Rates are based on the dealer’s credit and years in business as a licensed dealer—this is standard in the surety industry. Jet's mission is to provide affordable surety bonds to everyone. Our monthly payment option is a great option and is unique to the market! For those purchasing on monthly terms, there is no long-term commitment—you can cancel at any time. Purchase a new bond the moment you need to fire up your license again.

Who Needs a Dealer Surety Bond in California and Why?

California Dealer Classifications and Limits

Any person selling more than five vehicles per year needs to obtain a license from the California Department of Motor Vehicles Occupational Licensing. Financial institutions, manufacturers, exporters, dismantlers, charities, motor clubs, and dealership salespeople are exempt from needing a dealer license.

Used vehicle dealers, franchise vehicle dealers, and lessor-retailers need to obtain a $50,000 surety bond. Wholesalers, Motorcycle Only Dealers, Motorcycle Lessor-Retailer and All-Terrain Vehicle Dealers need to post a $10,000 surety bond.

If a Wholesale Dealer transacts more than 25 vehicles a year, they will need to post a $50,000 bond. An exemption with the Occupational Licensing Branch must be filed by the Wholesaler dealing less than 25 vehicles a year in order to forego the $50,000 limit in favor of the $10,000 bond.

Below illustrates which license classification needs which bond limits. For those dealers with multiple classifications, only one bond is needed. If one of those classes needs the $50,000 bond limit, then that is the limit your dealership needs to obtain. The auto broker classification is an endorsement for a license, however, some organizations have only that endorsement not tied to any other license type—for those rare organizations, a bond is not needed.

$50,000 Bond Limit

$10,000 Bond Limit

California Surety Protections

The surety bond is not for the benefit of the dealership that has to purchase it. That is why the bond is required and not optional. The State of California uses the surety bond (as does every other state) as a financial protection tool for the benefit of consumers who suffer losses arising from negligent or fraudulent dealer practices.

As a regulated third party, Jet Insurance Company provides a financial guarantee to the State in the form of a surety bond. Should a licensed dealership not only cause damage but fail to make amends, Jet Insurance Company will provide compensation to the damaged party. The State of California only has to track who has a bond, while the surety company provides the consumer protection service the State deems necessary.

More can be read in our article about Dealer Bond Claims, but simply put, the surety bond protects consumers and others from losses arising from:

Filing a Surety Bond to the CA DMV

There are three bond filing scenarios to be concerned with in order to effectively file a surety bond with the Occupational Licensing branch of the Department of Motor Vehicles.

New Applicants

Dealers applying for a new license or reactivating a license must file the original surety bond form, with the surety seal, to the CA DMV. This can be done at the local office servicing the dealer’s application. Jet will mail the original bond form to you. If you need the form quickly, select the overnight option when purchasing the bond.

Current Dealers

If you have an active license and surety bond, Jet will file the bond to the CA DMV for you. All dealers need to do is save the electronic bond copy that Jet provides immediately after purchase.

Current Dealers with License or Bond Issues 

Dealers that are close to or past their license and/or bond expiration will, in most cases, have a local inspector involved in their licensing affairs. That inspector will require an updated surety bond sent directly to them, which is best achieved by the dealer themselves. In those cases, Jet will mail or overnight (if requested) the original bond form to the dealer. In a pinch, Jet can fax or send the bond form directly to the inspector.

How to Apply for the California Dealer Bond With Jet

Applying with Jet starts by entering your business name and the entire process only takes about a minute to complete.

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If you are a current dealership you will need to verify your information is correct for the bond filing. The bond rate is based on the personal credit of the applicant, so a social security number is required—don’t worry it will not affect your credit and the soft inquiry only takes a second.

Those who are applying for a new license will need to provide the business name and address exactly as reported to the DMV Occupational branch. Accuracy is important to avoid any back-and-forth issues with the DMV inspector.

Read More About Motor Vehicle Dealer Bond Claims and Bond Handling With Jet

How to Renew My Bond

See the in and outs surrounding renewing with Jet—it’s quick.

How to Cancel My Bond

Looking to cancel? This article has all the details you need.

Bond Claim Process

Read more about claim causes and the claim process for dealers.

California Dealer Surety Bond Form Example

California Auto Dealer Bond Form

Notary Bond Application:

X

Business Information:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Employee Dishonesty Bond Application:

Business Information:

Business Description:

Coverage Requirements:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Contract Bond Application:

X

Business Information:

Owner Information:

Job Details:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Worker's Compensation Application:

X

Business Information:

Business Description:

Coverage Requirements

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information: