$50,000 surety bond required by the California Department of Motor Vehicles, Occupational Licensing branch, of every new, used, wholesale, autobroker, and lessor-retailer dealer.
California Vehicle Code §11710 requires every applicant for a vehicle dealer license to file a $50,000 surety bond on DMV form OL 25 before the license is issued. Wholesale-only dealers selling fewer than 25 vehicles a year may post a reduced $10,000 bond instead.
The bond protects buyers, lessees, lienholders, and the State of California from financial harm caused by:
| License Type | Bond | Notes |
|---|---|---|
| New Vehicle Dealer | $50,000 | Franchised dealers under MVB jurisdiction |
| Used Vehicle Dealer | $50,000 | Most common license |
| Wholesale (25+ vehicles/yr) | $50,000 | Dealer-to-dealer only |
| Wholesale (under 25 vehicles/yr) | $10,000 | Reduced amount |
| Autobroker (endorsement) | $50,000 | Endorsement on dealer license |
| Motorcycle Dealer | $10,000 | Reduced for motorcycle/all-terrain |
| Lessor-Retailer | $50,000 | Leasing & retail combination |
Premiums for the $50,000 California dealer bond are credit-driven. Most established dealers pay $500–$1,000 per year.
| Credit Profile | Annual Premium | Approx. Rate |
|---|---|---|
| Excellent Credit | $500 – $750 | 1% – 1.5% |
| Good Credit | $750 – $1,250 | 1.5% – 2.5% |
| Fair Credit | $1,250 – $1,750 | 2.5% – 3.5% |
| Credit Challenges | $1,750 – $2,500+ | 3.5% – 5%+ |
California dealer bonds renew annually with the DMV dealer license. The DMV mails renewal notices about 60 days before expiration. Lapsed bonds result in immediate license suspension and inability to issue dealer plates or process title transfers.
No. The autobroker authority is added as an endorsement to your existing dealer license. The same $50,000 bond covers both dealer and autobroker activities.
Only if your wholesale activity is genuinely under 25 vehicles per year. The DMV verifies this through dealer reports of sale; misclassification is grounds for license action.
Each established place of business under your master license must be listed on your bond. The DMV may require a separate location bond filing for branches.
Yes — failure to disclose a known lemon-law buyback when reselling is a covered violation that often results in claims.
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