You can get a quote and purchase your California Auto Dealer Bond in one minute. Save now with Jet!
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. This Auto Dealer Bond is required as a financial guarantee to protect consumers from damages arising from negligent or fraudulent dealer behavior.
There are two bond requirements for dealers and Jet has the best prices for both. 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 starts at $10 a month or $100 for one year. The same goes for motorcycle-only dealers who need a $10,000 surety bond. Multi-year terms are available for all bonds at a discount.
|Bond Type||Monthly||1 Year||2 Years|
|$50,000 Used/New Dealer||$38||$375||$656|
|$10,000 Wholesale/Motorcycle Dealer||$10||$100||$175|
Rates are based on the dealer’s credit and years in business as a licensed dealer. This is the case with all surety carriers, including Jet. What Jet can do, that other carriers cannot, is offer a monthly term. Car dealers no longer have to front large surety amounts to obtain their Motor Vehicle Dealer Bond.
Additionally, 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.
For businesses operating with a California lessor-retailer license, the preferred rates are as shown below in the chart.
|Bond Type||Monthly||1 Year||2 Years|
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 need which bond limits. For those dealers with multiple classifications only one bond is needed. If one of the those classes needs the $50,000 bond limit, then that is the limit your dealership needs to obtain. The autobroker classification is an endorsement for a license, however, some organizations just have that endorsement not tied to any other classification and for those rare organizations a bond is not needed.
$50,000 Bond Limit
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:
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.
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.
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.
Applying with Jet starts by entering your business name and the entire process only takes about a minute to complete.
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.