California Auto Dealer Bond

The cost of getting bonded depends on several factors.

First, you need to know whether you need to post the $10,000 or $50,000 bond amount, depending on the license you are applying for. These two sums refer to the maximum penal sum of the bond. In other words, if you have to compensate a claimant, you will not be required to pay more than $10,000 or $50,000.

Dealer bonds are renewed annually, and for this, bonding companies charge a premium. The premium is only between 1% and 3% of the bond amount for applicants with good credit. Credit score is the single most important determinant of your premium, because surety underwriters use it to measure the risk they undertake by signing the bond.

Sometimes other factors can be considered too, such as your financial strength, the availability of liquid assets, or even your industry experience. You can find full information on the factors sureties consider important on our What Does a Surety Bond Cost? Page.

Surety bond companies consider bad credit applicants to be a higher risk, and may sometimes be unwilling to underwrite bonds for them. With this issue in mind, we have developed our bad credit surety bonds program, which enables us to successfully help 99% of applicants get bonded.

Regardless of your credit score or history, we can help you stay compliant. The only two exceptions are applicants with open bankruptcies or late child support payments.

Bad credit applicants can expect premiums in the range of 5% to 10% of the total bond amount.

We have made it easy for you to apply and get your bond without the hassle. Our online application is fast and secure. Once you submit it, we will call you to confirm we’ve received it. You’ll get a bond quote and, once you’ve paid for the bond, we will need 1 to 2 business days to finalize your application.

Dealer bonds in California need to be renewed annually to remain valid. To renew your bond, you have to pay your bond renewal quote by the due date. Each year your bond policy should be reviewed by an underwriter, so the cost may vary year to year depending on your financial strength and personal credit. Of course, improving your credit or financial situation will typically mean a lower renewal quote too.

At Lance Surety Bonds we help our customers stay compliant by sending multiple renewal reminders ahead of the deadlines. That way you can focus on what matters to you: your business.

Your dealer license application form along with instruction on how to apply and what requirements you need to satisfy can be found on the California DMV’s website.

Here are some of the main steps you need to remember:

• Submit all required application forms for your license type
• Pay all applicable fees
• Submit a copy of your Fictitious Name Statement
• Submit proof of completed dealer training course
• Pass the DMV’s test
• Submit photographs of your business location

Different license types call for different requirements, so be sure to check them in their entirety prior to submitting your application.

If a disgruntled customer files a claim against you, you have two choices: to offer a settlement or fight the claim in court. A settlement is always the advised option, but it is not always possible.

In case a claim reaches court after all and the court considers it valid, you will have to financially compensate the claimants for a sum that cannot exceed $50,000.

You can consult your surety bond company in cases where you are facing a claim. If they think you are not in the wrong, they can help you with legal advice. To make sure you can effectively defend your case, keep documents of all your communication with the claimant.