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
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.