Considering getting your California auto dealer license? The process may seem complicated, but this guide can help you take the right steps toward getting licensed and bonded to do business. Learn more, and apply for the bond you need online today.
How to Get a California Dealer License
The first step toward getting licensed is deciding what kinds of vehicles you’ll be selling. California issues either a new vehicle dealer license or a used dealer or dealer wholesaler license. California also issues licenses to motorcycle and all-terrain vehicle dealers, but this article focuses on auto dealers in the state.
New California auto dealer applicants can consult�form OL-248A�for a complete checklist of information the state requires, and used dealer or wholesaler applicants can consult�form OL-248B. Among other items, new dealer applicants must submit the following information to the California Department of Motor Vehicles:
- Application for original occupational license, Part C
- Original application for occupational license, Part A
- $175 non-refundable application fee (plus other applicable fees)
- California auto dealer surety bond
- Authorization to release financial information
Used California auto dealer applicants must submit the same documents and fees, including others, and must attend a dealer education program and pass a DMV-administered exam. Both new and used dealers should consult the state-provided checklists and thoroughly review their application requirements before submitting any information to the DMV.
California Auto Dealer Surety Bond
Most California auto dealer applicants need a $50,000 surety bond to become licensed, though wholesale-only dealers selling less than 25 vehicles per year need only a $10,000 surety bond. Single Source Insurance can write a California auto dealer surety bond for as little as $400 a year!
California auto dealer surety bonds guarantee the dealer’s performance in accordance with the California Vehicle Code. Some violations of the code and consequently of the surety bond include the following:
- Making untrue or misleading statements in advertising
- Advertising or representing used vehicles as new vehicles
- Engaging in business without a valid surety bond
- Advertising prior use or ownership of a vehicle inaccurately
Section 11713 of the Vehicle Code and its subsections detail several other license violations, which can result in license suspension or revocation and fines of up to $1,000 per violation. In the event of a violation that causes monetary damages to a consumer, the consumer can file a claim against the dealer’s surety bond. If a claim is proven and paid, the bonded party must reimburse the surety for the damages paid out.
More Information for California Auto Dealers
Among many other prerequisites to become a licensed California auto dealer, the state requires a place of business inspection. Each business location must be inspected, including all business records and books.�Business signs must be no less than two square feet and readable from 50 feet away, containing the business’s name and address. The state of California has created a how-to guide for new applicants, as well as guide for licensed dealers, which every California auto dealer should consult to stay compliant.
Ready to get a California auto dealer surety bond? Single Source Insurance can help!