Motor Vehicle Dealer ($50,000) - E FILED Bond - Statewide in California

Brief Summary

The $50,000 is the standard California dealer bond, but two smaller amounts exist and one of them comes with a trap. Vehicle Code 11710 sets $50,000 for dealers generally and $10,000 for motorcycle and all terrain vehicle only dealers. Section 11710.1 sets $10,000 for a dealer who sells vehicles on a wholesale basis only and sells fewer than 25 vehicles per year. A wholesale only dealer under that threshold can also apply for the DMV's $50,000 bond exemption on form OL 56, and if that dealer does not file the $50,000 bond before selling the 25th vehicle in a year, the license is cancelled automatically under Vehicle Code 11721(b). Retail dealers do not get any of that. They post $50,000 on form OL 25.

California requires a vehicle dealer to file a surety bond executed by an admitted surety insurer and approved as to form by the Attorney General. Under Vehicle Code 11710 the standard amount is $50,000, filed on DMV form OL 25, running to the People of the State of California and conditioned against fraudulent practices causing monetary loss. Liability under the bond must remain at full value, and a decrease in coverage or an outstanding court judgment against the dealer suspends the license.

We can help with all California bonds!

How to Apply for a Motor Vehicle Dealer ($50,000) - E FILED Bond:

• File a $50,000 dealer surety bond on DMV form OL 25, or the $10,000 bond on OL 25B if you are a motorcycle or all terrain vehicle only dealer or a wholesale only dealer under 25 vehicles per year
• Use an admitted surety insurer, on a bond approved as to form by the Attorney General
• Name the People of the State of California as obligee
• Keep liability at full value, since a decrease in coverage or an outstanding judgment suspends the license
• Submit the Application for Original Occupational License, OL 12, with the OL 248N or OL 248U forms packet
• Complete the Dealer Education Program if you are a used vehicle dealer or wholesale only dealer applying initially
• Provide proof of continuing education every two years at renewal
• Pay the $175 nonrefundable application fee, the $425 new motor vehicle board fee per location, and $70 for each branch
• If claiming the wholesale only exemption, file form OL 56 with the renewal notice and fees, and file the $50,000 bond before the 25th sale in a year

Detailed Information About the California Motor Vehicle Dealer ($50,000) - E FILED Bond:

The three amounts

• Dealers generally: $50,000 under Vehicle Code 11710, on form OL 25
• Motorcycle and all terrain vehicle only dealers: $10,000
• Wholesale only dealers selling fewer than 25 vehicles per year: $10,000 under Vehicle Code 11710.1, on form OL 25B

The amounts are set by what you sell and how you sell it, not by revenue or inventory size. A retail used car dealership doing modest volume still posts $50,000.

The wholesale only exemption, and the sentence that ends it

DMV form OL 56 is titled $50,000 Bond Exemption Application (Wholesale-Only Dealers). A wholesale only dealer that sells fewer than 25 vehicles per year may apply, and the exemption applies to a one year or two year renewal term, filed with the renewal notice and fees. Dealers claiming it are subject to review by the department. The catch is in Vehicle Code 11721(b): if the dealer does not file the $50,000 bond before selling the 25th vehicle in a year, the license is cancelled automatically. That is not a warning letter, it is cancellation.

What the bond must look like

Executed by an admitted surety insurer, approved as to form by the Attorney General, running to the People of the State of California on form OL 25, and conditioned against fraudulent practices that cause monetary loss. The statute requires liability under the bond to remain at full value. Any decrease in coverage, or an outstanding court judgment against the dealer, automatically suspends the license, which is why a partial claim payment has to be restored rather than left as is. The bond may be cancelled by the surety in accordance with the bond law provisions beginning at Code of Civil Procedure section 996.310.

Training does not replace it

A certificate of completion from a Dealer Education Program is required for used vehicle dealer and wholesale only dealer initial applicants, and renewal requires proof of continuing education every two years. Both sit alongside the bond and change nothing about the amount.

Fees and forms

DMV lists a nonrefundable $175 application fee, a $125 renewal fee, $70 for each branch location, $92 for dealer plates and $94 for motorcycle plates, plus a $425 new motor vehicle board fee per location. The application sets are the New Dealer Applications Forms Packet OL 248N and the Used Dealer Applications Forms Packet OL 248U, with the Application for Original Occupational License OL 12 and the Renewal Application OL 45.

The bond gets the license issued. It does not bring anyone onto the lot. Any licensed dealer can also claim a free listing at BestAutoDealerIn.com, a directory searchable by zip code and state, with a backlink that helps your own SEO, sends referrals, and gets a blog post written about your dealership.

Eligibility and Requirements for a California Motor Vehicle Dealer ($50,000) - E FILED Bond:

• Bond amount of $50,000 for a standard dealer license
• Admitted surety insurer, bond approved as to form by the Attorney General
• People of the State of California as obligee, filed with the Department of Motor Vehicles
• Business name on the bond matching the occupational license application exactly
• Bond conditioned against fraudulent practices resulting in monetary loss
• Cancellation by the surety only in accordance with the bond law provisions beginning at Code of Civil Procedure section 996.310
• Credit review of the owners, which shapes the rate rather than eligibility for most applicants at this bond size

California Motor Vehicle Dealer ($50,000) - E FILED Bond FAQs:

Official and Additional Resources for the California Motor Vehicle Dealer ($50,000) - E FILED Bond: