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California Auto Dealer Bond

The auto dealer bond does not protect the used car dealer from lawsuits, but it protects the consumer from fraud or misrepresentation by the car dealer.  Auto Dealer Bond guarantee compliance with state laws and every state sets its own bond amount, period and expiration date.

All auto dealers in California are licensed through the California Department of Motor Vehicles. There are two different applications for new dealers and all other types of dealers, but application packages and checklists for both are readily available. A background check will be run for every applicant.

To Find out What Type of License You Need:

  • New or Used Commercial Auto Dealer: This license permits you to sell new or used cars and trucks to the public, as well as to licensed vehicle dealers
  • Used Auto Dealer: This license permits you to sell only used cars and trucks to the public and to licensed vehicle dealers
  • Wholesale Dealer: This license permits you to sell only to licensed vehicle dealers
  • Auto broker: This license allows you to provide the service of arranging, negotiating, and otherwise assisting in the purchase of a new or used vehicle for an individual in exchange for compensation.

You can apply for an additional auto broker endorsement with any of the first three license types.

Obtain Licenses and Permits

The licenses and permits you need to acquire are:

Note: If you are offering repair services, you will have to apply with your local Bureau of Automotive Repair.

Arrange a Place of Business Inspection

You are required to arrange an appointment with an Occupational Licensing inspector. The inspector will inspect your place of business, including the office, the books and records, the display area, and the signs. For further details on the exact procedure, visit the DMV’s website.