California Used Car Dealer Bond Overview

If you are planning to enter the used car dealer market in California, the DMV will require that you post a used car dealer bond. Briefly put, the bond is an agreement between three parties:

  • The DMV (obligee)
  • Your dealership (principal)
  • A surety bonds company (surety)

If the principal doesn’t adhere to the terms of the bond agreement, they may be liable for sums up to $50,000– the total value of the bond. All dealers are required to be compliant with the provisions of the California Vehicle Code or face legal consequences.

If you’re ready to apply for your used car dealer bond, simply click on the button below. You will receive a free bond quote with no obligations. To learn more about these bonds, such as how to calculate your costs or how to protect your dealership from claims, continue reading below.

Start your surety bond application today! Why us?
  • Pay and print your bond in minutes
  • Tailor-made advice on building a strong application
  • Exclusive bad credit programs

What’s the Cost of a California Used Car Dealer Bond?

$50,000 is the maximum coverage of the bond, but how much is the cost for dealers? That depends on multiple factors, most importantly the personal credit score of the owner or owners.

Applicants with good credit (a FICO above 700) may pay as little as 0.75% of the total bond amount per year, or around $375. Premiums for applicants with bad credit (a FICO of below 650) can go up to 10%, about $5,000 a year.

The table below contains more detailed information about expected premiums.

Surety Bond Cost by Credit Score
Bond Type Bond Amount Above 700 Between 650-699 Between 600-649 Below 599
California Used Car Dealer Bond $50,000 $375-$750 $500-$1,500 $1,250-$2,500 $2,500-$3,500

* The table provides a bond cost ballpark estimate based on the applicant's credit score. Actual bond prices can differ due to a number of factors. For an exact quote, please complete our online application. It's fast and 100% free!.

These amounts are just estimates. Keep in mind that other factors can also influence your premiums, such as industry experience, financial strength or past claims. Submit our online application if you want to get an exact quote.

Ready to apply? Then simply get a free no-obligations quote, so you can see our low prices!

Information for Applicants with Bad Credit

Getting bonded with bad credit can be more difficult because these surety bonds are considered high-risk for bonding companies. This is why your premium can be much higher if you have a bad credit score.

Bryant Surety Bonds offers a Bad Credit Program, through which the majority of applicants are guaranteed to get bonded.

Your credit score might not always stand in the way of a lower premium. While it’s importance cannot be negated, if you submit strong personal and business financial records as well as a strong resume of your experience, these factors can work in your favor.

To learn more about the factors contributing to the cost of getting bonded, check out our surety bond cost guide.

Start Your Application Today!

Applying online for your California used car dealer bond is easier than ever. It will take you just a few minutes to submit our one-page application. We’ll be in touch with you via email to give you a free bond quote, along with instructions on finalizing your application.

When we have everything we need, we’ll get in touch with the surety bonds company and get its signature. We email you a digital copy of your bond, and send you the original form via mail.

How to Avoid Claims Against Your Dealer Bond

California is one of the states which is experiencing a high volume of claims against dealer bonds. This is why you need to be sure that you understand your obligations under the bond. Examples of activities which are prohibited are:

  • Odometer rollback fraud
  • Financial fraud, such as the yo-yo financing scheme
  • Failing to honor a car’s warranty (beware of oral warranties)
  • Providing false information about a car’s condition
  • Selling salvage cars without disclosing information about the car’s history
  • Selling cars without a license or attempting to sell cars as a private party

It is important to understand the provisions of the Vehicle Code, the California Lemon Law, and FTC’s Used Car Rule and guidelines on deceptive advertising among others.

Getting a California Used Car Dealer License

Besides obtaining your surety bond, there will be a number of other steps you need to take in order to get your used car dealer license in California. Here are some of them:

  • Get a resale permit from California’s Board of Equalization
  • Complete dealer education training from an approved provider
  • Submit a copy of a rent or lease agreement for your lot
  • Submit photographs of your lot (specific requirements apply)
  • Pay application fees

Be sure to check the OL 248B, Used Dealer, Dealer-Wholesale Only, and Autobroker Application Checklist for complete information on getting licensed as a used car dealer in California.

Once issued, your license is valid for one year. After that, renewal of both the license and the bond are due. Dealer education training must be completed every two years.

Our guide on becoming a dealer in California contains more useful information on the topic.

About us:
Bryant Surety Bonds, Inc. is a surety bond agency based in Pennsylvania. Licensed in all 50 states and with access to over 20 T-listed, A-Rated bonding companies, we have the contacts, expertise, and top service to provide you with a hassle-free experience, all while offering competitive rates for your surety bond.