Auto dealer bond in California: amount and cost
California dealers file a $50,000 continuous bond on DMV form OL 25; with good credit it costs about $375 to $750 a year.
Auto dealer bond premium in California
$375 to $750
estimated, per year, for a $50,000 bond
| Bond the state requires | $50,000 |
| Which amount | Retail or wholesale dealer |
| Rate for credit 700 or higher | 0.75 % to 1.5 % a year |
| Term | 1 year, renewed yearly |
Estimate from published rate grids, not a quote. Cal. Veh. Code § 11710. Amount read on the official page, October 22, 2026.
Compiled by Radif Partners · Method and sources · rule read October 22, 2026
A California vehicle dealer, retail or wholesale, must file a $50,000 surety bond with the Department of Motor Vehicles under section 11710 of the Vehicle Code. The DMV's own bond form, OL 25, binds the dealer and the surety to the People of the State of California "in the penal sum of FIFTY THOUSAND DOLLARS". The bond is continuous: it stays in force until cancelled, and the dealer pays the surety a premium each year. A cash deposit on form OL 25E can replace it, but ties up the full amount. Wholesale-only dealers that sell fewer than 25 vehicles a year can claim an exemption on form OL 56. The premium depends on the owner's credit: on published dealer grids, about $375 to $750 a year with a score of 700 or more, $1,250 to $2,500 between 600 and 649, and $3,750 to $5,000 under 550. Rule read on October 22, 2026.
The OL 25 bond
California does not accept a generic dealer bond. The surety must use DMV form OL 25, whose wording binds the principal and surety "are held and firmly bound to the People of the State of California in the penal sum of FIFTY THOUSAND DOLLARS ($50,000)" (DMV form OL 25). The form names the dealer exactly as licensed, with any fictitious business name, and carries the surety's signature and power of attorney. A bond on another form is returned, and the license application waits.
The bond is continuous. It does not expire with the license year; it runs until the surety or the dealer cancels it with notice to the DMV. The surety bills its premium each year, and a dealer who stops paying will see the bond cancelled and the license suspended unless a new bond is filed in time.
Cash instead of a bond, or no bond at all
A dealer can deposit $50,000 in cash with the DMV on form OL 25E instead of buying a bond. It avoids the premium but freezes the money for as long as the license exists, and the deposit is returned only after the license ends and any claims period passes. Few new dealers choose it.
Wholesale-only dealers that sell fewer than 25 vehicles in a 12-month period can file an exemption on form OL 56 and skip the bond. Crossing the 25-vehicle line ends the exemption, and a bond must then be filed.
California next to other states
Auto dealer bond premium in Texas
$500 to $1,500
| Bond the state requires | $50,000 |
| Which amount | Tex. Transp. Code § 503.033 (HB 3533, 2021) |
| Rate for credit 650 to 699 | 1 % to 3 % a year |
| Term | 1 year, renewed yearly |
What it costs
The premium is priced on the owners' personal credit and their experience in the trade. With a score of 700 or more, published grids give $375 to $750 a year. A new dealer with no prior license may pay more within the same credit tier. The dealer bond overview compares California with Texas, which asks the same amount for a two-year license.
The California rule as read
| Item | Value |
|---|---|
| Retail or wholesale dealer | $50,000 |
| Wholesale-only, under 25 vehicles a year (exemption) | no bond |
| Rule | Cal. Veh. Code § 11710 |
| Line read | “are held and firmly bound to the People of the State of California in the penal sum of FIFTY THOUSAND DOLLARS ($50,000)” |
| Page | www.dmv.ca.gov |
| Read on | October 22, 2026 |