California Vehicle Code §11710
Section 11710 of the California Vehicle Code is the statute that requires every licensed motor vehicle dealer in California to post a surety bond with the DMV. It is the single most important statute in the California auto-dealer-bond world - and the statute every dealer page on this site links back to.
§11710 At a Glance
Source: Cal. Veh. Code §§11710-11722 (Div. 5, Ch. 4, Art. 1).
Need to file a §11710 bond with the California DMV this week? Our underwriters issue the $50,000 dealer bond on California-admitted paper, same-day in most cases.
Start a QuoteWhy §11710 Is the Anchor Statute
California licenses more vehicle dealers than any other state in the country - over 30,000 active dealer licenses across new-car franchises in Los Angeles, independent used lots in Sacramento, Otay Mesa cross-border wholesale operations, and the Silicon Valley EV resale market. Every one of them passes through Vehicle Code §11710 before the Occupational Licensing Branch issues a license.
The statute does three things at once. First, it sets the dollar amount of the bond the State of California demands as a financial guarantee of compliance with the Vehicle Code. Second, it ties that bond amount to a wholesale-volume threshold (25 vehicles) that determines whether the dealer is a §11710(a) standard filer or a §11710(b) reduced filer. Third, it makes the bond a continuous license condition under §11710(d), meaning a lapse in the bond suspends the license automatically.
Reading citations: "Cal. Veh. Code §11710(b)" means California Vehicle Code, Section 11710, subdivision (b). The Vehicle Code is part of the 29 California codes adopted by the Legislature, published officially at leginfo.legislature.ca.gov by the Office of Legislative Counsel.
The Sections That Actually Matter
§11710 does not stand alone. It sits inside Division 5, Chapter 4, Article 1 of the Vehicle Code, surrounded by companion sections that decide who gets licensed, who keeps a license, and who can sue on the bond when something goes wrong.
Standard $50,000 Surety Bond
Requires every applicant for a dealer license to procure and file a $50,000 surety bond payable to the State of California, conditioned on the dealer's compliance with the Vehicle Code provisions governing the sale and transfer of motor vehicles.
$10,000 Wholesale-Only Reduced Bond
Carve-out reducing the bond to $10,000 for wholesale-only dealers who sell fewer than 25 vehicles per calendar year. Filed on Form OL 25B and limited to dealer-to-dealer transactions only.
Cash Deposit Alternative (OL 25E)
Permits a dealer to deposit cash or a savings-account assignment in lieu of a surety bond. Filed using Form OL 25E. Functionally equivalent to the surety bond but ties up the dealer's liquid capital.
Continuous Bond Requirement
The bond must remain in force continuously for the duration of the dealer license. Cancellation requires written notice to the DMV, and the bond remains liable for acts occurring before the effective cancellation date.
Aggregate Liability Cap
Caps the surety's total exposure at the face amount of the bond ($50,000 or $10,000) for the aggregate of all claims arising during any bond year, regardless of how many consumers, lienholders, or agencies file claims.
Who May Sue on the Bond
Identifies the universe of parties with standing to recover on the §11710 bond: any person (including a public agency) who suffers a monetary loss because the dealer failed to satisfy a vehicle conditional-sale obligation, perfect a title, or pay sales tax, fees, or vehicle license fees.
Established Place of Business
Requires every licensed dealer to maintain an established place of business with a permanently affixed sign, posted hours, and adequate office space. Implementing rules sit in 13 CCR §270.00.
Wholesale-Only Dealer Restriction
Limits a wholesale-only dealer to selling motor vehicles only to other licensed dealers, dismantlers, or to persons outside California. Selling at retail revokes the wholesale-only status and the §11710(b) reduced-bond eligibility.
120-Day License Issuance Clock
Requires the DMV to either issue or deny a dealer license within 120 days of the applicant's completion of every statutory pre-licensing requirement, including the §11710 bond filing and §11704.5 dealer-education course.
Pre-Licensing Dealer Education
Mandates a DMV-approved pre-licensing education course (6 hours for used dealers, 4 hours of continuing education at first renewal) before a used vehicle dealer license can be issued.
Autobroker Endorsement
Establishes the separate autobroker endorsement for dealers acting as brokers in retail vehicle transactions and imposes a separate $50,000 autobroker bond (filed in addition to the §11710 dealer bond) before the endorsement issues.
Biennial Renewal Cycle
Sets the dealer license term and the biennial (every two years) renewal cycle. The §11710 bond and §11712 place-of-business compliance both run with the license and must be maintained continuously through each renewal.
§11710(a) - The Standard $50,000 Bond
Subdivision (a) is the default rule. It requires every applicant for a motor vehicle dealer license - new, used, motorcycle, RV - to procure and file a $50,000 surety bond with the DMV before a license issues. The bond is payable to the State of California and runs to the benefit of anyone protected by §11711.
"Before any dealer's license shall be issued or renewed by the department to any applicant therefor, the applicant shall procure and file with the department a good and sufficient bond in the amount of fifty thousand dollars ($50,000), executed by an admitted surety insurer… conditioned that the applicant shall not practice fraud, make any fraudulent representation, or violate any of the provisions of this code."
What §11710(a) Demands
- $50,000 face amount on every retail dealer and on wholesale dealers selling 25+ vehicles annually
- Issued by a California-admitted surety insurer, filed on Form OL 25
- Payable to the State of California as obligee
- Premium typically 0.5%-2% of face value - see California dealer bond cost
What the Bond Covers
- Consumer loss from dealer fraud or Vehicle Code violations
- Failure to perfect title or pay off existing lienholders
- Unpaid sales tax (CDTFA) and unpaid DMV registration fees
- Misappropriation of trade-in payoff funds or down-payment deposits
Most California dealers procure the bond before they finish the rest of the application packet, because the §11710(a) bond is the prerequisite the rest of the California dealer licensing process waits on. Underwriters require a completed application, owner credit, and a signed indemnity - the bond itself prints on the standard California motor vehicle dealer bond form.
§11710(b) - The $10,000 Wholesale-Only Carve-Out
Subdivision (b) creates the most-asked-about exception in the California dealer world. If the dealer is wholesale-only under Vehicle Code §11703 and sells fewer than 25 vehicles in a calendar year, the bond requirement drops from $50,000 to $10,000 and the filing moves from Form OL 25 to Form OL 25B reduced-amount filing.
The 25-vehicle threshold is hard
Sell 24 vehicles in a calendar year wholesale-only? §11710(b) and the $10,000 bond. Sell 25 or more? Back to §11710(a) and the $50,000 bond on Form OL 25 - plus an obligation to swap the bond before the next renewal. Sell a single vehicle at retail? You are no longer wholesale-only under §11703 and §11710(b) no longer applies, regardless of unit volume.
The reduced-bond track is popular with niche operators - boutique exporters running dealer-auction stock through Otay Mesa, dealer-to-dealer brokers handling rare inventory, classic-car flippers who deal only with other licensed dealers. For everyone else, the §11710(a) $50,000 bond is the default.
§11710(c) - The Cash Deposit Alternative
Subdivision (c) authorizes a dealer to satisfy the §11710 obligation by depositing cash or a savings-account assignment with the DMV in lieu of a surety bond, using Form OL 25E. The deposit amount matches the face value the bond would carry - $50,000 under §11710(a) or $10,000 under §11710(b). The DMV holds the deposit, and claimants recover against it the same way they recover against a surety bond.
When the cash route makes sense: A dealer with significant idle liquidity and a poor credit profile who has been quoted high premium rates may find the opportunity cost of parking $50,000 with the DMV lower than paying multi-year surety premiums. For everyone else, the surety bond preserves working capital and is the dominant choice. Talk to our licensed producer before locking up cash with the DMV.
§11710(d) & (e) - Continuous Bond + Aggregate Cap
§11710(d) - Continuous in Force
The bond must remain in force continuously for the duration of the dealer license. Cancellation requires written notice to the DMV (typically a 30-day notice), and the surety remains on the hook for any acts that occurred during the bonded period - the tail of coverage survives the cancellation date. A lapse in the bond is grounds for automatic license suspension.
§11710(e) - Aggregate Liability Cap
The surety's total exposure is capped at the face amount of the bond ($50,000 or $10,000) for the aggregate of all claims during a bond year. If twenty consumers each have a $10,000 claim and the cap is $50,000, recovery is pro-rated. The cap is per-bond, not per-claimant - a critical limit to flag for dealers operating high-volume retail.
Companion Statutes Every CA Dealer Touches
§11710 sets the bond. The surrounding sections govern who can claim against it, what else the dealer must maintain, and how the license cycles. Read them as a single package - the DMV does.
Who May Sue on the Bond
§11711 grants standing to any person, including a public agency, who suffers monetary loss because the dealer failed to satisfy a conditional sale contract, perfect title, pay sales tax or registration fees, or discharge a lien. Consumers, lienholders, CDTFA, and the DMV itself are routine claimants. The §11710 bond is the recovery source under §11711 - the two sections are joined at the hip.
Established Place of Business
§11712 requires every dealer to maintain an established place of business with permanently affixed signage, posted business hours, sufficient office and record storage space, and (for retail) outdoor display area. The implementing regulations are codified in Title 13 of the California Code of Regulations, §270.00, and are inspected by the DMV before the license issues. No place of business, no license, regardless of bond.
Wholesale-Only Dealer Restriction
§11703 confines wholesale-only dealers to selling motor vehicles only to other licensed dealers, dismantlers, or buyers outside California. A single retail sale to a California consumer revokes the wholesale-only status and the §11710(b) reduced-bond eligibility. See our deep dive on the California wholesale dealer bond.
120-Day License Clock
§11704 obligates the DMV Occupational Licensing Branch to issue or deny a dealer license within 120 days after the applicant completes every prerequisite, including the §11710 bond filing, Live Scan fingerprinting requirement, dealer education, and place-of-business inspection. Incomplete filings pause the clock - it does not run during a deficiency.
Pre-Licensing Dealer Education
§11704.5 mandates a DMV-approved pre-licensing education course for used vehicle dealers - typically 6 hours before initial issuance and 4 hours of continuing education at first renewal. New vehicle franchise dealers are exempt. The course must be completed before the §11710 bond is filed and the 120-day §11704 clock can run. See the California dealer education course guide.
Autobroker Endorsement
§11735 creates the separate autobroker endorsement for dealers who act as broker for the retail buyer (rather than seller of record). The autobroker must file a separate $50,000 autobroker bond in addition to the §11710 dealer bond. Two bonds, two filings - see the California autobroker endorsement guide.
Biennial Renewal
§11722 sets the dealer license at a two-year term and establishes the CA DMV's biennial renewal cycle. The §11710 bond runs continuously across renewal cycles - the dealer pays a fresh surety premium when due, but the underlying bond filing stays on the DMV record.
License Classes Affected by §11710
Every California dealer license class lives under §11710. The bond amount, filing form, and statutory citation vary by class.
| License Class | Bond Amount | Form | Cite | Silo Page |
|---|---|---|---|---|
| New Motor Vehicle Dealer | $50,000 | OL 25 | §11710(a) | View → |
| Used Motor Vehicle Dealer | $50,000 | OL 25 | §11710(a) + §11704.5 | View → |
| Wholesale-Only Dealer (≥ 25/yr) | $50,000 | OL 25 | §11710(a) + §11703 | View → |
| Wholesale-Only Dealer (< 25/yr) | $10,000 | OL 25B | §11710(b) + §11703 | View → |
| Motorcycle Dealer | $50,000 | OL 25 | §11710(a) | View → |
| Autobroker (Endorsement) | $50,000 separate | OL 25 | §11735 | View → |
Did the CARS Act (SB 766) Change §11710? No.
California Senate Bill 766 - the state-level companion to the FTC's Combating Auto Retail Scams (CARS) Rule - became effective on October 1, 2026. SB 766 layers new advertising, add-on disclosure, and document-fee transparency obligations onto California vehicle dealers. It does not amend Vehicle Code §11710. The $50,000 standard bond and $10,000 wholesale-reduced bond remain unchanged.
Competitor-gap clarification
Several SEO blogs in 2025-2026 conflated SB 766 / the CARS Rule with the §11710 dealer bond. They are unrelated regulatory regimes. SB 766 sits in the Vehicle Code advertising/sales chapters and in the Civil Code; §11710 sits in Division 5 of the Vehicle Code (licensing). If you read anywhere that the California dealer bond changed because of CARS, that is wrong. The bond is still $50,000. Read our full breakdown on the California CARS Act explained page.
Where SB 766 does intersect dealer operations is in the documentation and ad-compliance side: clear out-the-door pricing in advertising, written add-on consent, capped document fees, and enhanced record-keeping. None of that touches the §11710 filing. If your bond was sufficient on September 30, 2026, it is sufficient on October 1, 2026 - and every day after.
All content is researched from official state and federal sources (.gov) and verified before publication. BuySuretyBonds.com works with Treasury-certified, A-minimum rated surety carriers serving all 50 states.
California Vehicle Code §11710 FAQs
The questions CA dealers, applicants, and consumers ask most often
What is California Vehicle Code 11710?
California Vehicle Code §11710 is the statute that requires every licensed motor vehicle dealer in California to file a $50,000 surety bond ($10,000 reduced bond for wholesale-only dealers selling fewer than 25 vehicles per calendar year) with the California Department of Motor Vehicles before a dealer license can issue. The bond is payable to the State of California and conditioned on the dealer's faithful compliance with the Vehicle Code.
How much bond does Cal. Veh. Code §11710 require?
The standard §11710(a) bond is $50,000. The §11710(b) reduced bond is $10,000 and is available only to wholesale-only dealers who sell fewer than 25 vehicles in a calendar year. Both amounts are statutory face values - the dealer's annual premium is a small percentage of that face value, typically $250 to $1,000 for the $50,000 bond depending on credit.
What is the OL 25B threshold?
The OL 25B threshold is 25 vehicles per calendar year. A wholesale-only dealer who sells fewer than 25 vehicles in a calendar year may file Form OL 25B with a $10,000 surety bond under §11710(b). A wholesale dealer who sells 25 or more vehicles in a calendar year must file Form OL 25 with the standard $50,000 §11710(a) bond.
Does §11710 apply to motorcycle dealers?
Yes. Motorcycle dealers are licensed as motor vehicle dealers under the same chapter and must file the standard $50,000 §11710(a) bond on Form OL 25. There is no motorcycle-specific reduced bond - the §11710(b) carve-out applies only to wholesale-only volume, not to motorcycle product mix.
Did SB 766 (the CARS Act) change the §11710 bond?
No. SB 766 - California's implementation of certain FTC CARS Rule transparency provisions, effective October 1, 2026 - did not amend §11710. The $50,000 standard bond and $10,000 wholesale carve-out remain unchanged. SB 766 addresses advertising, add-on disclosures, and document-fee transparency, not the bond requirement.
Can I post cash instead of a bond under §11710?
Yes. Vehicle Code §11710(c) permits a dealer to deposit cash or a savings-account assignment with the DMV in lieu of a surety bond, filed on Form OL 25E. The cash deposit must match the face amount the bond would carry ($50,000 standard or $10,000 wholesale-reduced). Most dealers choose the surety bond because the cash alternative locks up working capital that could otherwise finance inventory.
Who can sue on a California Vehicle Code §11710 dealer bond?
Vehicle Code §11711 grants standing to any person, including a public agency, who suffers a monetary loss because the dealer failed to (1) satisfy a conditional sale contract, (2) perfect title or transfer a vehicle properly, (3) pay state sales tax, registration fees, or vehicle license fees, or (4) discharge a lien. Consumers, lienholders, the Board of Equalization/CDTFA, and the DMV itself are all routine claimants.
How long does a §11710 bond stay in force?
Vehicle Code §11710(d) requires the bond to remain in force continuously for the life of the dealer license. Cancellation requires written notice to the DMV (typically 30 days) and the surety remains liable for acts occurring before the cancellation effective date. The license itself runs on a biennial renewal cycle under §11722.
What is the aggregate liability cap on a §11710 bond?
Vehicle Code §11710(e) caps the surety's total exposure at the face amount of the bond ($50,000 or $10,000) for the aggregate of all claims during the bond year, no matter how many consumers, lienholders, or agencies file claims. Once that cap is exhausted, claimants pursue the dealer's own assets.
Is the §11710 bond the same thing as the autobroker bond?
No. A dealer who holds an autobroker endorsement under Vehicle Code §11735 must file a separate $50,000 autobroker bond in addition to the §11710 dealer bond. Two licenses, two bonds. The §11710 bond covers retail and wholesale dealer activity; the §11735 bond covers brokered transactions where the dealer acts as agent for the buyer.
Do used vehicle dealers need anything beyond the §11710 bond?
Yes. Used vehicle dealers must complete a 6-hour pre-licensing dealer education course under Vehicle Code §11704.5 before the license issues, plus a 4-hour continuing education course at first renewal. New vehicle dealers are exempt from §11704.5. The §11710 bond and §11712 established place of business apply to both new and used.
What is the 120-day clock under §11704?
Vehicle Code §11704 obligates the DMV Occupational Licensing Branch to issue or deny a dealer license within 120 days after the applicant completes every statutory prerequisite - including the §11710 bond filing, §11712 place-of-business inspection, §11704.5 education (used dealers), Live Scan fingerprinting, and the dealer license examination. Incomplete filings stop the 120-day clock.
Does §11710 apply to wholesale-only dealers selling to other dealers?
Yes. A wholesale-only dealer under Vehicle Code §11703 must still file a §11710 bond, but the bond amount drops to $10,000 under §11710(b) if the dealer sells fewer than 25 vehicles per calendar year. Crossing the 25-vehicle threshold flips the filing to the standard $50,000 §11710(a) bond on Form OL 25.
What rule governs the §11712 place-of-business requirement?
Vehicle Code §11712 establishes the requirement; the implementing regulations sit in Title 13 of the California Code of Regulations, §270.00. A dealer must maintain a fixed location with permanently affixed signage, posted business hours, an office sufficient for transacting business and storing records, and (for retail dealers) sufficient outdoor display space.
How often does a California dealer renew the §11710 bond?
The dealer license itself renews biennially (every two years) under Vehicle Code §11722. The §11710 surety bond is typically written on an annual or biennial premium term but remains continuous under §11710(d) - the dealer simply pays the surety's renewal premium when due. Lapse in the bond is a license-stopping event.
What is the difference between §11710(a) and §11710(b)?
§11710(a) is the default rule: a $50,000 surety bond for every licensed dealer. §11710(b) is the carve-out: a $10,000 bond for wholesale-only dealers selling under 25 vehicles per calendar year, filed on Form OL 25B. Selling a single retail vehicle, or hitting the 26th wholesale unit, knocks the dealer back into §11710(a).
Is the §11710 bond a Treasury-listed surety bond?
No - the §11710 bond is a state bond, not a federal bond, so the Department of the Treasury Listing (Circular 570) does not control admission. The bond must be written by a surety authorized to transact business in California by the Department of Insurance. Most major Treasury-listed national sureties also hold California admissions and write §11710 bonds.
Where is California Vehicle Code §11710 located in the codes?
Vehicle Code §11710 sits in Division 5, Chapter 4, Article 1 of the California Vehicle Code, the chapter governing the licensing of vehicle dealers, distributors, and manufacturers. The official codified text is published at https://leginfo.legislature.ca.gov - the California Legislative Information service maintained by the Office of Legislative Counsel.
Can the DMV revoke a license if the §11710 bond lapses?
Yes. Vehicle Code §11710(d) makes the bond a continuous license condition. A lapse triggers automatic suspension of the dealer license, and a sustained lapse becomes a revocation cause. The dealer also remains liable on the surety's tail coverage for acts that occurred during the bonded period.
How is the §11710 bond different from the federal Miller Act bond?
They are unrelated. The §11710 bond is a state license bond protecting California consumers and tax agencies against dealer misconduct. The federal Miller Act bond (40 U.S.C. 3131-3134) is a contract bond protecting subcontractors and suppliers on federal construction projects. Different statutes, different obligees, different bond forms.
Pages Affected by Cal. Veh. Code §11710
Every California auto-dealer-bond page on this site traces back to §11710
Official Sources
Verify everything on this page against the primary sources below before relying on it for a license filing.
- California Legislative Information (leginfo.legislature.ca.gov) - Official codified text of Vehicle Code §§11710-11722.
- California DMV Occupational Licensing Branch - Forms OL 25, OL 25B, OL 25E; license application workflow.
- California Bureau of Automotive Repair (BAR) - Adjacent occupational licensing for repair shops; not a §11710 obligee but routinely interacts with dealers.
- California Code of Regulations - Title 13, §270.00 - Implementing rule for the §11712 established place of business.
Need a §11710-Compliant California Dealer Bond?
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