California dealer bond requirements: quick overview

California dealer bond requirements are a mandatory step for retail and wholesale vehicle dealers before the DMV will issue or renew a dealer license. The bond protects consumers, lienholders, and the State from losses when a dealer fails to meet legal or financial obligations.

How much bond do you need?

The bond amount depends on the dealer type. Use the table below to match your license class to the minimum bond required.

The $50,000 and $10,000 amounts are established in the California Vehicle Code (see Sources).

What the bond protects and when it pays

The surety bond protects consumers, lienholders, and government entities against losses caused by a dealer’s failure to meet legal or financial obligations. Common covered situations include unpaid registration fees, failure to transfer title, or failure to pay off a trade-in loan. The bond is not insurance for the dealer; it guarantees that affected parties may seek recovery for certain dealer defaults, and the surety may then seek reimbursement from the dealer.

Exact name on the bond: why it matters

The ownership name written on the bond must exactly match the dealer’s legal business structure. Errors or omissions can invalidate the bond for licensing purposes and may lead to renewal denial or license suspension. Use these rules:

• Sole proprietor: full legal name of the individual, plus any DBA.
• Partnership: full legal names of all partners, plus any DBA.
• Corporation or LLC: the exact corporate or LLC name as registered, plus any DBA.

Acceptable forms and who issues the bond

The dealer bond must be issued by an admitted surety insurer or an equivalent instrument acceptable to the DMV (such as a cash deposit or certificate of deposit in certain circumstances). Keep a current, valid bond or equivalent on file at all times—an expired or inaccurate bond can cause DMV to suspend a license or deny renewal.

Renewal checklist: what to submit and when

To avoid interruption or automatic cancellation after the 30‑day grace period, submit the following through the DMV Occupational Licensing portal before your license expiration:

• Current evidence of the required surety bond or acceptable equivalent.
• Continuing education/renewal certificate (when applicable under DMV rules and your course requirements).
• All renewal fees and any other requested documents.

Failure to submit a current bond or correct ownership name can result in denial of renewal or administrative action.

Practical tips for dealers

• Confirm your legal business name exactly as it appears on your Articles of Organization or incorporation documents before ordering the bond.
• Order renewals early—allow time for the bonding company and DMV to process paperwork.
• Keep a digital copy of the bond and the surety carrier contact for quick re‑submission if DMV requests clarification.
• If you change business structure (for example, sole proprietor to LLC), obtain a new bond that reflects the new legal name and file it with DMV immediately.

Quick FAQ

Q: Can a non‑admitted insurer issue my bond?

A: No. The bond must be issued by an admitted surety insurer or be an acceptable cash/CD equivalent filed with the DMV.

Q: What if my wholesale sales are low—can I qualify for the $10,000 bond?

A: Wholesale-only dealers that sell fewer than 25 vehicles per year may qualify for the reduced $10,000 bond under California law (see Sources).

Final note

Dealer Educator’s pre‑license and renewal courses explain bond rules, name accuracy, and renewal submission procedures in detail. Treat the surety bond as an active compliance item—maintain continuous coverage and accurate ownership details to protect your license and your customers.

Sources

California Vehicle Code §11710 (dealer bond requirement)

California Vehicle Code §11710.1 (reduced $10,000 bond for low‑volume wholesale dealers)

California DMV Occupational Licensing (submit renewals and bond evidence)

California Vehicle Code §12204 (Consumer Motor Vehicle Recovery Fund)