Wholesale Dealer Bond California Overview

To apply for a wholesale car dealer license in California, you need to post a $10,000 auto dealer bond to the DMV.

Why do I need a bond?

The bond guarantees that you will comply with your obligations as wholesale dealer under the state Vehicle Code.

If you violate your obligations and responsibilities and cause losses to a purchaser, seller, financing agency or other parties, a claim can be filed against your bond.

Your surety will then investigate the claim and may extend compensation to claimants. The amount of compensation it extends may be as high as the full amount of your bond.

If this is the first time you're applying for a bond, have a look at our ‘What is a surety bond' guide to learn more about how bonds work, and why they are needed!

Start your surety bond application today! Why us?
  • The lowest possible rates
  • A 100% money-back guarantee
  • Access to specialty programs, not available to small agencies

See the sections below to learn more about the cost of getting bonded, how to avoid giving rise to claims, and how to apply for your bond.

If you have any additional questions about the bond required of wholesale dealers in California, call us at (866)-450-3412!

What's the Cost of the California Wholesale Dealer Bond?

Your bond premium is a percentage of the total bond amount which you need to pay to get bonded. That percentage is influenced by the following factors.

Factors that determine your premium

Your personal credit score has the greatest influence on the cost of your surety bond. The higher your score is, the cheaper it will be to get bonded. This is due to sureties considering credit score a reliable indicator of the likelihood of a claim being made against a bond - the higher the score, the lower the likelihood.

For this reason, applicants with excellent to good credit scores can expect to be offered a rate between .75% and 5% of the amount of their bond.

Respectively, applicants with lower to bad scores are offered bond rates between 5% and 10%.

Your surety may also want to review some of the following information to more precisely determine your bond rate:

  • Personal and business financial statements
  • Fixed and liquid assets
  • Industry experience

Want to get an estimate of your bond cost, based on credit score? See the table below!

California Wholesale Dealer Bond Cost Based on Credit Score

License type

Bond Amount

Credit Score
Above 700 650-699 600-649 Below 599
Wholesale dealer $10,000 $100-$150 $100-$300 $250-$500 $500-$750

What Can Give Rise to a Claim?

According to the bond form for wholesale dealers in California, the bond's purpose is to protect purchasers, sellers, financing and governmental agencies from fraud and misrepresentation that cause them losses. The bond is further conditioned on dealers' compliance with section 11711 of the California Vehicle Code.

If a dealer violates the provisions of this section or engages in fraud, anyone harmed by their actions may file a claim against their bond to seek compensation. The surety that has issued the bond is then obligated to investigate the claim and determine the appropriate amount of compensation to extend to claimants.

Sureties may, depending on the amount of losses, extend compensation for as much as the full amount of a bond. Yet, under the bond agreement, once a surety extends compensation, the bonded party must repay it in full. Liability for bond claims always lies with the bonded party.

Bond claims are complicated and costly to resolve. They harm businesses' reputation and make it harder for them to get bonded again in the future. It is therefore recommended that you comply with the conditions of your bond agreement at all times, so as to avoid the difficulties that arise with a claim.

Apply Here to Get Bonded!

Ready to apply? Click on the banner below and complete the bond form. We'll get in touch with you shortly, and provide you with a free quote on your bond!

Not ready to apply? Then simply get a free no-obligations quote, so you can see our low prices!

If you have any further questions about the bonding requirements for wholesale dealers in California, call us at (866)-450-3412!

Further Reading


About the author:
Todd Bryant
Todd Bryant is a graduate of Germantown Academy and the University of Pittsburgh College of Business Administration Honors College. He has been President of Bryant Surety Bonds, Inc., an A+ rated Business with the Better Business Bureau, since 2007. Licensed as a producer with the Department of Insurance, he has been published in the National Association of Surety Bond Producers newsletter and on numerous authoritative publications such as The Washington Post, Entrepreneur.com, Azcentral.com and many more.