Many States Require Car Dealers to Provide an Auto Dealer Bond – Part 3

We’ve already visited the surety bond requirements for Florida and Texas, so now let’s take a look at what is required for California and Georgia.

California

The California Department of Motor Vehicles requires all new and used car dealers to provide a $50,000 auto dealer bond (Form OL 25). Motorcycle dealers, motorcycle lessor-retailers, all-terrain vehicle dealers and wholesale-only dealers are required to obtain a $10,000 auto dealer bond (Form OL 25B).

The bond is designed to protect purchasers, sellers, financing companies and governmental agencies from fraudulent practices on behalf of the dealer. According to the California Department of Motor Vehicles, “the bond shall run concurrently with the license period for which the license is granted and the aggregate liability of the Surety shall not exceed the penal sum of the bond in any event.”

Georgia

In Georgia, only used car and used car parts dealers are required to obtain a surety bond. In addition to being registered and licensed, the Georgia State Board of Registration of Used Motor Vehicle Dealers and Used Motor Vehicle Parts Dealers require these dealers to purchase and maintain a $35,000 surety bond. The Georgia dealer license application and surety bond form can be found here.

The Board defines used motor vehicle dealers as “motor vehicle brokers, independent motor vehicle leasing agencies which sell or offer to sell used motor vehicles, used motor vehicle auction companies and pawnbrokers who sell motor vehicles to the public. Used parts license include used parts dealers, rebuilders, and salvage dealers.”