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Section 1

Basic Licensing Requirements

1.3 $50,000 Dealer Bond

  1. The general rule is that most dealers must maintain a $50,000 bond at all times. There are exceptions, which are discussed below. The bond must be submitted prior to renewal of the dealer's license. The bond effective date must also be prior to the current license expiration date.
  1. Exceptions:
    1. Motorcycle only dealers.
    2. Wholesale only dealers who sell less than 25 vehicles per year. These dealers are required to maintain only a $10,000 bond on file with the DMV. Note that if you have the $10,000 bond on file, and you discover you may sell more than 25 vehicles at wholesale in a year, you may then submit a rider to the DMV from your bonding company raising your $10,000 bond to $50,000, or submit a new $50,000 bond. The rider or bond must be on file with the DMV before selling 25 or more vehicles in a given year, and before your prior bond expires.
    3. The dealer bonds ($50,000, or $10,000), must be continuously on file with the DMV. If your bond expires your license is cancelled, not suspended, immediately, and must be surrendered to the DMV. You would then have to apply for a whole new license.
  • Bond Company Recommendation:
    1. YourCarDealerBond.com.
    2. We have trained thousands of dealers over the past 15 years. We continually ask our dealers, and new dealers, for their their reccomendations for the best bond rates. The most recommended company, by far, has been YourCarDealerBond.com. We contacted them verify their rates. They offered to provide our dealers their very best rates. If you decide to contact them for a quote, the best way is to e-mail Mike Ramos at Mike@yourcardealerbond.com. Mike is the president of the company so you are talking the head of the company, not a salesperson. Tell him you were recommended by Motorsports Market to get their very best rate.

    2.1.2 Methods of compliance:

    1. 1. File a Surety Bond of Dealer, form OL25, executed by an admitted surety insurer in the amount of $50,000. If you need a form you can download it at the DMV's
    2. File a $50,000 cash deposit with DMV with Form OL64, or OL65 as required. You can get these forms at same link as above. Remember, the DMV may keep your $50,000 cash bond for up to three years after you cease business to satisfy any potential claims that may surface during that time.
    3. File a rider to your current bond stating the bond amount is increased to $50,000. The rider must also indicate that a financing agency may make a claim to the bond.

    2.1.3 List of Surety Companies:

    1. A list of Surety Companies to choose from may be found at our website at:


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