Have a question? 
+1 815-826-6324 (815-8-BondAI) 
phil@AmericasSuretyBonds.com
Army Veteran Owned | Expert Surety Bonds Since 2004
Have a question? +1 815-826-6324 (815-8-BondAI) phil@AmericasSuretyBonds.com
Army Veteran Owned | Expert Surety Bonds Since 2004
This is a city bond, not the state one, and it does not replace anything the DMV requires. Hawthorne Municipal Code 5.28.030 requires a $2,500 bond filed with the director of licensing and code enforcement before any used car dealer permit is granted, running to the city and to any person, firm or corporation aggrieved. Its single condition is narrow and specific: failure to deliver clear title to whoever is legally entitled to it within forty-five days after final payment. Your California DMV dealer bond under Vehicle Code 11710 is separate and still required.
Hawthorne requires an applicant for a used car dealer permit to file a $2,500 bond with the director of licensing and code enforcement at the time the application is filed. The bond runs to the city and to any person, firm or corporation aggrieved, is executed by the applicant as principal and by a corporation licensed by the California Insurance Commissioner to transact fidelity and surety insurance, and no license or permit is granted until it is on file.
We can help with all California bonds!
Section 5.28.030 sets the penalty at two thousand five hundred dollars, joint and several. It is flat. Nothing in the chapter scales it by lot size, sales volume or years in business.
The bond insures the city and any person, firm or corporation aggrieved against loss or damage from any transaction involving a used motor vehicle caused by the dealer's failure to deliver a clear title to the person legally entitled to it within forty-five days after final payment has been made. That forty-five day clock is the operative standard, and it is worth building your title process around it.
One clause changes how the bond behaves over time. The bond is not void upon the first recovery. It may be sued and recovered upon from time to time by any person aggrieved until the whole penalty is exhausted. A partial claim does not end it, but it does eat into the $2,500 available to the next claimant.
A corporation licensed by the Insurance Commissioner of California to transact the business of fidelity and surety insurance. The bond is filed at the time the permit application is filed, and no license or permit is granted until it is on file.
On receipt of the application, the director notifies the chief of police and the city manager. The chief of police has twenty-one days to investigate the applicant's character, antecedent business practices, general reputation and previous business record, and files a report with the city manager, who investigates the location and physical condition of the premises, may require plans and specifications, and submits a recommendation to the city council.
The premises standards are unusually specific. Two inch asphalt, macadam or concrete surface over at least two inches of decomposed granite. Grading for drainage that prevents stagnant water. Buildings conforming to the Uniform Building Code as adopted. Toilet facilities with adequate plumbing. Shrubbery, hedges, fences or barriers along the front line between eighteen and thirty inches high, subject to planning commission approval. A sign in letters at least six inches high, legible from fifty feet, naming the authorized dealer. A fixed place of business with all vehicles offered for sale on display, and no inoperable vehicles on the premises unless the site is also a licensed garage or repair shop, with that work done inside an enclosed building.
The license fee is two hundred dollars per year, nonapportionable, or on a gross receipts basis, whichever is greater. Permits expire on December 31 following the date of issuance and may be renewed from year to year on application. Enlarging to contiguous property or moving requires a new application in the same manner as an original permit, with a five dollar application fee for a change of location. Discontinuing business for more than ninety days automatically relinquishes the permit, revoked without further city council action. Records of every purchase, consignment, sale or exchange must be kept intact for three years and open to city inspection.
Section 5.28.160 exempts a valid new car dealer license holder from paying the used car permit fee, provided all other provisions of the chapter are complied with, only used cars traded in for new cars sold by that licensee are sold on the used lot, and all gross receipts from those trade ins are reported in the gross receipts affidavit used for the new car license fee. Read it closely, because it exempts the fee, not the rest of the chapter.
The bond gets the city permit issued. Buyers still have to find 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.
No. This is a City of Hawthorne permit bond under Municipal Code 5.28.030. The state DMV dealer bond under Vehicle Code 11710 is a separate filing with a separate amount and a separate obligee.
Loss or damage to the city or to any person, firm or corporation from a used motor vehicle transaction caused by the dealer's failure to deliver a clear title to the party legally entitled to it within forty-five days after final payment.
No. The code says the bond is not void upon the first recovery and may be sued and recovered upon from time to time by any person aggrieved until the whole penalty is exhausted. Each paid claim reduces what remains of the $2,500.
No. The penalty is fixed at $2,500. What varies with gross receipts is the annual license fee, which is $200 per year or the gross receipts amount, whichever is greater.
You are exempt from paying the used car permit fee under section 5.28.160, but only if you comply with all other provisions of the chapter, sell only used cars traded in for new cars you sold, and report all gross receipts from those trade ins in the gross receipts affidavit for the new car license. The exemption is about the fee, not the rest of the chapter.
All used car dealer permits expire on December 31 following the date of issuance and may be renewed from year to year upon application.
Yes. Discontinuing business for a period exceeding ninety days automatically relinquishes all right or interest in the permit, and it is revoked without any further action by the city council.
A two inch asphalt, macadamized or concrete surface over at least two inches of decomposed granite, grading that prevents stagnant water, buildings conforming to the Uniform Building Code, toilet facilities with adequate plumbing, and front line shrubbery, hedges, fences or barriers between eighteen and thirty inches high subject to planning commission approval.
Hawthorne does not set premium. A surety prices the $2,500 bond off underwriting: the owners' personal credit, business financials, time in the industry, and any prior claims. At this size it is one of the smaller filings in a dealer's file, and the rate is the only variable.
A free listing at BestAutoDealerIn.com puts any licensed dealer in a directory searchable by zip code and state. The listing carries a backlink that supports your own SEO, sends referrals, and listed dealerships can get a blog post written about them.
This website is a referral and marketing platform that connects users with licensed insurance agents. We do not issue surety bonds directly except in states where we are licensed. All bond applications are processed and fulfilled by licensed agents. By using this site, you agree to our Terms & Conditions, Privacy Policy, and the use of cookies. If you do not agree, please exit the site.
