California Motor Vehicle Dealer Bonds

Did you know every car dealer in California is required to have a California Motor Vehicle Dealers Bond for $50,000 in order to maintain or obtain a business license? The Surety Division team at AAU: Allied American Underwriters can assist with a marketing strategy to target these bonds, including how to get a leads list. More information about Vehicle Dealerships licensing requirements can be found on the California Department of Motor Vehicles website.

California Motor Vehicle Dealer Bond Details

The bond protects the Obligee (State of California DMV) by transferring the cost of ensuring the public is compensated for damages resulting from a licensed business breaking licensing laws to a surety bond company. This bond must be issued by an insurance carrier admitted by the Department of Insurance. The Motor Vehicle Dealer Bond should not be confused with the Wholesale Dealer bond, required for wholesale motor vehicle dealers in the amount of $10,000.

The three parties of a California Motor Vehicle Dealers Bond:

  • Obligee: State of California Department of Motor Vehicles – Licensing Operations Division, Occupational Licensing Branch, P.O. Box 932342, MS:L224, Sacramento, CA 94232-3420
  • Principal: The Motor Vehicle Dealer
  • Surety: The Surety Company

Targeting Dealers

  • Use the How To Find CA Dealerships – Bond sheet to obtain a list of dealer contacts.
  • In order to obtain their license, all new dealers must attend a class. Contacting the business who offers the educational course may lead to a steady stream of bond applicants.

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