The California DMV dealer bond — also called a motor vehicle dealer bond or auto dealer bond — is a surety bond required of every licensed vehicle dealer in the state. It is filed with the California Department of Motor Vehicles (DMV) as a condition of obtaining and keeping a dealer license. It isn't insurance for the dealer: it protects the people you do business with, and if the surety pays a claim, you must repay it.

What Is a California Dealer Bond?

Vehicle Code § 11710 requires the bond and sets its condition: the dealer will not practice fraud or make any fraudulent representation that causes a monetary loss to a purchaser, seller, financing agency, or government agency. The bond must stay at full value for as long as the dealer can be held liable for a violation.

$50,000 or $10,000: Which Bond Do You Need?

$50,000 — Most Dealers

The standard bond applies to new and used car dealers, RV dealers, and wholesale dealers selling 25 or more vehicles a year, as well as any dealer selling to retail buyers.

$10,000 — Qualifying Dealers

The DMV's reduced bond form (OL 25 B) covers four types of dealers:

Wholesale Dealers: Watch the 25-Vehicle Line

The reduced wholesale bond depends on selling only wholesale and fewer than 25 vehicles a year. If your business grows past that, the $50,000 bond applies. We'll confirm the right amount before you apply, so your DMV filing isn't rejected for the wrong bond.

Who Needs a DMV Dealer Bond?

You need a California dealer bond if you sell, or plan to sell, vehicles as a licensed dealer, including:

Who Can Make a Claim on the Bond?

Buyers, sellers, finance companies, and government agencies that lose money because of a dealer's fraud or fraudulent representation can claim against the bond (Vehicle Code § 11710). The state and local governments can also claim for amounts owed to them (§ 11711). Claims are generally limited to the value of the vehicle involved, and claimants who aren't licensed dealers get priority over those who are.

What Happens If a Claim Is Filed?

  1. The claim is filed with the surety, or as a lawsuit on the bond.
  2. The surety investigates and contacts you for your side.
  3. If the claim is valid, the surety pays the claimant up to the allowed amount.
  4. You repay the surety for anything it pays, under the indemnity agreement you signed with the bond.

New Dealers Welcome

Starting a dealership? We work with sureties that bond new dealers and help you get licensed. Good credit means the lowest rates, but we have options across the credit spectrum.

How Much Does It Cost?

You do not pay the full bond amount. You pay an annual premium — a percentage of the bond amount based mainly on your personal credit and business history. We submit your application to several surety companies, and each sets its own rate, so your premium depends on which surety approves you and isn't set until you're approved.

Can You Get a Dealer Bond With Bad Credit?

Often, yes. Credit is a major factor in your rate, and some sureties write dealers with credit challenges. Because we submit to several surety companies, a decline from one isn't the end — if one declines, we go to the next.

Keeping Your Bond and License Active

How to Get Your Dealer Bond

  1. Contact us for a free quote.
  2. Complete a short application — we handle underwriting.
  3. Get approved and pay your premium.
  4. Receive your bond to file with the DMV.

Why Advanced Surety?

We place dealer bonds for new and established dealers throughout California. Because we work with several A-rated surety companies, your application isn't limited to one carrier — which matters most for new dealers and anyone whose credit makes approval harder. We also confirm the correct bond amount and form before you file.