Dealer Surety Bond in California: $50,000 Requirement
California requires all licensed dealers to maintain a $50,000 surety bond. Here is exactly what you need, what it costs, and what happens when a claim is filed.
Bond Requirement at a Glance
Required for all licensed dealers (new/used/wholesale). Amount set by DMV based on dealer category.
Who Needs a Surety Bond in California
Every new, used, and wholesale dealer must file a surety bond before DMV issues a dealer license.
- New vehicle dealer
- Used vehicle dealer
- Wholesale dealer
- Motorcycle dealer
- Salvage dealer
How to Get a Bond in California
Where to get it: Any state-licensed surety company (Nationwide, Berkshire Hathaway, SuretyBonds.com)
DMV accepts bonds from any insurer licensed in California. Bond form must be the DMV-approved OL 605.
Annual Premium Cost
$250–$750/year (0.5%–1.5% of bond face value)
Premium depends on your personal credit score. Strong credit (720+) gets the lowest rate.
How Claims Work
Buyer or state files claim with surety company. Surety investigates; valid claims paid up to $50,000. Dealer must reimburse surety.
A claim does not directly affect your license but repeated claims will raise your premium or cause non-renewal.
Penalties for Operating Without a Bond
California-Specific Note
California-Specific Facts for Dealer Surety Bond
California Vehicle transfer fees and requirements
In California, the title transfer fee is $23 and registration costs $46 base fee plus additional fees. Vehicle sales are subject to 7.25% base state rate; total can reach 10.25% with local taxes. California does not require notarization for private-party vehicle transfers. Emission testing is required in California — verify the vehicle passes before completing the sale.
- Smog certification required for vehicles 4+ model years old
- REG 262 form required for title transfer
- Use tax due within 30 days if purchased from a private party
- Smog transfer fee of $8 applies
Official California bill of sale form
The official California bill of sale form is REG 135 (Bill of Sale). BillOfSaleNow generates a document that meets all California requirements and can be used in place of the official form.
California sales tax on vehicle purchases
California has a 7.25% state sales tax rate. 7.25% base; county/city adds 0.25–3.25% (total up to 10.75%). Private-party vehicle sales in California are subject to sales tax. Use tax applies to private party purchases at the same rate. The title transfer fee is $23.
California bill of sale statistics
BillOfSaleNow has generated 14,217 bill of sale documents for California transactions, with 382 generated this month alone. The most popular vehicle type is car.
More California Vehicle Guides
- Curbstoning Laws in California
- Dealer Doc Fee in California
- Dealer Fraud Claim in California
- Dealer Prep Fees in California
- Vehicle Deposit Refund in California
- Sell Car With Suspended License in California
Each guide is written specifically for California laws, agencies, and procedures. Bookmark for future reference.
Frequently Asked Questions
How much is a dealer surety bond in California?
California requires a $50,000 surety bond for licensed dealers. Required for all licensed dealers (new/used/wholesale). Amount set by DMV based on dealer category.
Who requires a dealer surety bond in California?
California DMV Occupational Licensing requires the bond. Every new, used, and wholesale dealer must file a surety bond before DMV issues a dealer license.
How much does a dealer surety bond cost annually in California?
Expect to pay $250–$750/year (0.5%–1.5% of bond face value). Premium depends on your personal credit score. Strong credit (720+) gets the lowest rate.
What happens if a California dealer doesn't have a surety bond?
License revocation; fines up to $5,000; criminal misdemeanor for operating without a bond.
How does a surety bond claim work in California?
Buyer or state files claim with surety company. Surety investigates; valid claims paid up to $50,000. Dealer must reimburse surety. A claim does not directly affect your license but repeated claims will raise your premium or cause non-renewal.
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Generate Bill of SaleSource: California DMV Occupational Licensing. Verify current bond amounts with your state DMV before purchasing.