Although we can place a wide variety of bonds, Your Car Dealer Bond | Cal-Surety specializes in Car Dealer Bonds (aka Used Car Dealer Bonds or Auto Dealer Bonds), Vehicle Registration Service Bonds, Motor Vehicle Ownership Bonds (aka Defective Title Bonds) Car Wash Bonds, and California Immigration Consultant Bonds.
We know that you have a choice in which company you use for your surety bond services of California! And for that reason, we thank you for giving YCDB the chance to earn your business! Here’s a link that will help you through the surety bond process: https://cal-surety.com/auto-dealer-bond/
Your Car Dealer Bond has invested in technology that allows you to pay with an electronic check which makes the payment process nearly instantaneous. This technology allows you to literally take a picture of your check and text it to us or fax it to us if that is better. Of course, a scanned copy of the check can also be emailed to us or we can take a credit card payment to initiate your surety bond purchase.
You can always call one of our friendly staff members for assistance however, Your Car Dealer Bond will notify you approximately 30 days prior to your expiration date. Depending on your preference, you can make payment by check, debit card, and most major credit cards. Having more options is another reason more used car dealers are choosing YCDB as their preferred bond services of California!
Be sure to make payment prior to your bond expiration date in order to avoid cancellation and any associated fees.
We can issue surety bonds the same day as all documents and payment is received. Our proprietary process involves various methods to help speed things up just for you.
From the manner in which we can accept payment to the ability you have to track your incoming bond, Your Car Dealer Bond | Cal-Surety plain and simple makes things super easy for you.
This may be one of the key reasons we are one of the fastest local, family-owned surety bond services of California!
YCDB has various surety companies that can offer premium pricing to Permanent Residents. In most cases, we can have the rates back from 5 companies within 1 day. Give us the opportunity to earn your business by making things simple and inexpensive for you by leveraging our experience and technology.
The California DMV insurance does not require proof of insurance to get or keep your used car dealer license. Even though it is not mandatory, getting insurance can save you quite a lot of trouble in your day-to-day operations.
Your Car Dealer Bond | Cal-Surety created the Surety Bond FAQ exactly for this reason. We have a deep understanding of the insurance and bond business and enjoy imparting that knowledge to others that have questions!
The issuing governing entity controls whether a dealer bond is mandated and determines the required bond limit. The surety company issues a bond that is signed by their power-of-attorney, stamped with an embossed seal, and then notarized, thus validating it as an official document. Oftentimes bonds are required before business owners can get a license to operate in a certain city or state. It is important to note that the government entity issuing the license is provided the Dealer Bond and activate a claim against the bond if the licensee is not fulfilling the obligations voluntarily.
A Used Car Dealer Bond is a legal contract that guarantees and protects customers. The Dealer Bond promises to provide aid in the recovery of financial loss resulting from dealer fraud or unethical business activity. Most states require motor vehicle dealers to procure a Surety Bond in order to operate legally. The Bond also acts as a line of credit and assists in regulating the Dealer industry. An Auto Dealers Bond conveys credibility to both current and future customers.
The typical participants of a dealer bond are: Obligee – The government entity or individual requiring a “principal” to be bonded. Principal – The primary person who is required to be bonded. Surety – financial guarantor who assures the “obligee” that the “principal” can perform the task. Let our professional and highly-skilled staff support you through the most confusing part of the dealer licensing process. NOTE: The Dealer is responsible for reimbursement of any paid bond claim.
All states have a specific division created to deal with overseeing the licensed vehicle dealers doing business legally. In states like Arizona, this division is called the Motor Vehicle Department (MVD) and in states like California, dealers will recognize the name Department of Motor Vehicles (DMV). The majority of the DMV’s require there to be certain protections in place to safeguard the general public (or the retail transactions).
That said, not only will a used car dealer bond offer some type of recourse to a buyer who may have become the victim of fraud, but it will also provide protection to other dealers. The transactions done between 2 dealers are called wholesale transactions. The state of California will allow a private-party to sell 5 vehicles per year before they are required to obtain a dealer license (wholesale or retail).
This is the #1 most common question we receive even though it’s actually a DMV pre-licensing test question. The answer is a little complicated but hopefully, this makes sense. There is a carve-out in the law that allows a $10,000 bond for motorcycle-only retail dealers. The only additional exception is made for wholesale-only dealers that are selling less than 25 vehicles per year. All other wholesale, auto broker, or retail car dealers need a $50,000 bond.
Surety bond premiums vary due to the following reasons:
- Surety bond limit ($10,000 or $50,000 in California).
- Credit Score. The Experian Credit Score is what most surety bond carriers will rate your bond based in 2018.
- Application and Financial Credentials. Financials are usually not used for California Car Dealers thankfully.
- Whether you finance or pay in full. We have a payment option for some of our auto dealer bonds depending on the carrier that is writing that surety bond.
Bond premiums can range between 1% and 15% of the bond limit. Complete our quick and easy application today. It’s FREE!
Your Auto Dealer Bond should be active by the time you plan to see your DMV inspector to get licensed. For instance, if you place to the see the inspector on the 3rd Thursday of the month, your bond should be active on that Monday or Tuesday latest. Most dealers like to get the most for their money so they don’t want to pay for any dead time but this is strategy could save you as much as a week of time as you will read about in the next question.
The California DMV has a very specific carve-out in the law for wholesale-only auto dealers. The exception is meant to offer low-volume, wholesale-only dealers the opportunity to get lower limit auto dealer bonds. As a result, wholesale dealers save themselves some money. This is actually a question on the DMV Pre-Licensing test so most dealers already know this rule but it’s worth mentioning given how many times I hear this question. Wholesale Dealers that sell less than 25 cars/trucks per year can get away with the $10K surety bond. The only other carve out exists for Motorcycle-only dealers, regardless of retail or wholesale. Motorcycle-only dealers also have no sales caps in order to still qualify for the $10K bond.
The protection that a surety bond provides is for your customers and partners, not for your business. It’s meant to safeguard the interests of the general public, other car dealers, and the lenders that provide financing for inventory.
No. The DMV is tracking the number of sales transactions to determine your car dealer bond limit. The number of cars you purchase is not factored in. That said, if you are buying too many cars and not selling them, eventually the California Department of Tax and Fee Administration (CDTFA) may start poking around. The reason is that vehicles you purchase as a wholesale dealer typically generate a taxable profit. If that vehicle was never sold, the CDTFA would never get to collect a tax on the profit you made on the auto sale.
An auto broker endorsement used to be the way to do that in California. However, the DMV is trying to eliminate this specific license type. That said, the auto broker business model is still alive and well! They still need to obtain a $50K auto dealer bond, though.
The California DMV has a very specific carve-out in the law for wholesale-only auto dealers. The exception is meant to offer low-volume wholesale dealers the opportunity to get lower-limit auto dealer bonds. Wholesale dealers who sell less than 25 cars or trucks per year can get away with the $10K surety bond. The only other carve-out exists for motorcycle-only dealers, regardless of retail or wholesale. Motorcycle-only dealers also have no sales caps to still qualify for the $10K bond.
Since the only carve-out in the California DMV law is for motorcycle-only dealers, you will need a $50K auto dealer bond if you are getting a license to sell vehicles directly to the public. Retail truck, trailer, RV, and boat dealers all need a $50K surety bond.
