This bond is required by the Department of Motor Vehicles. It is taken out by a new or used car dealer to ensure that the dealership follows all state laws and regulations. This includes taxes, licensing guidelines, and all major managing guidelines that a car dealership must abide by.
A surety bond is a legally binding contract between three parties.
- The Principal is the dealership that is taking out the bond.
- The Obligee is the governing agency, in this case, the Department of Motor Vehicles.
- The Surety is the company that writes and covers the surety bond.
When a dealership takes out an auto dealer bond, they are protecting consumers and building trust with the general public. The bond protects against fraudulent activities and all wrongful acts that may transpire at the dealership.
The California Motor Vehicle Dealer Bond goes by other names, like
- Auto Dealer Bond
- DMV Bond
- Car Dealer Bond