California vehicle dealerships need to get their financial house in order prior to entering the DMV's licensing process. Per California law, a dealer bond serves as a protection for customers, protecting them from possible negligence or fraud claims against the dealership. Currently, car dealerships are required to carry a $50,000 bond before they can finalize and receive official licensure by the Department of Motor Vehicles (DMV).

In California, anyone selling five or more vehicles in a year needs to obtain a license from the DMV's Occupational License Department. Used vehicle dealers and franchise dealers require $50,000 surety bonds for licensing. Achieving an occupational license is essential for legally carrying out business operations as a car dealer in The Golden State!

Do you need a bond for your auto dealership? It depends on the license classification: if it's New or Used Motor Vehicle Dealer, or Motor Vehicle Lessor-Retailer, then you will require $50k in coverage.

Surety bonds are a critical financial protection provided to consumers in California and other states. These bonds protect customers from possible losses stemming from negligent or fraudulent dealer activities.

As a dealer, make sure your bond is always current and up to date. Also, if you ever receive any communication from your bond company, always follow up and respond timely as some letters, emails, or phone calls from your bond company may be time sensitive.