No person shall act as a dealer without having first been issued:
A Dealer license or a temporary permit.
A dealer must post a bond of $ 50,000. prior to license being issued.
An unpaid ASF can result in bond activation and loss of license
The bond is basically a promise, which guarantees payment of DMV fees and penalties, sales and use tax and the order of a judge, known as a ( judgment ). One may post cash, assign savings or rent the money by paying a premium to a bond company. The amount of rent due is based on the credit of the owners of the dealership. In selecting a bond, California rated carriers are preferred. Typical rates for bonds, with good credit. $ 200. for a 10K bond And $ 680. for a 50K bond. Rates for previously bankrupt individuals can run as high as $ 5000. premium with $ 5000. collateral.
For Dealer Surety Bond Forms go to https://www.dmv.ca.gov/portal/file/surety-bond-ol-25-pdf/ or see sample on page 11.
A lesser bond of $ 10,000. is allowed for wholesale only if: fewer than 25 sales annually.
- In lieu of posting a bond, a dealer may deposit cash with the DMV or with an approved FDIC bank or savings and loan.
- This deposit shall be held 3 years after license is retired. With no claims outstanding, the deposit is returned.
- It is unlawful to operate w/o having a bond in effect. The office of the principal place of business, and each branch location, must be established prior to license issuance. Photo set of each required.
- Temporary, transitory & mobile offices are acceptable, provided items are not a part of the inventory for sale.
- All records must be kept at the place of business. (4 years)
- The display area of each location, required for retail locations, must comply as follows:
It must be of sufficient size to accommodate each type of vehicle the dealer is licensed to sell and be clearly marked for exclusive use. Display areas must be within 1000 ft. of the office.
- For Dealer Surety Bond Forms go to: https://www.dmv.ca.gov/portal/file/surety-bond-ol-25-pdf/ or see sample on page 11.
Permanent signage required for retail locations sufficient to withstand weather. A temporary sign is allowed with a permanent sign on order.
- It shall have an area of at least two ( 2 ) square feet per side.
It shall be able to be read from a distance of fifty ( 50 ) feet.
- At each location the dealer must post the dealer’s license.
At each location the dealer must post the sales license(s)
The sales license fee is $ 93. with no test, good for three years.
See Related Links, Forms and Sample Documents:
- For Dealer Salesperson Application go to: https://www.dmv.ca.gov/portal/file/application-for-salesperson-license-ol-16s-pdf/ or see sample on page 12.
- For Livescan Form go to: https://www.dmv.ca.gov/portal/file/request-for-live-scan-service-applicant-submission-dmv-8016-pdf/ or see sample on page 13.
- For Livescan Locations go to:https://oag.ca.gov/fingerprints/locations
- For Exemption Form go to:
For wholesale only the bond varies. If the dealer sells 24 cars or less per year a $ 10,000 bond is sufficient.
For Exemption Form go to: https://www.dmv.ca.gov/portal/file/continuing-education-exemption-application-ol-257-pdf/ or see sample on page 14.
For a wholesale selling 25 cars or more per year a bond of $50,000 is needed.