Notifying the DMV of Dealership Ownership Changes

If you experience any changes in dealership ownership, such as transitioning from an LLC to a corporation, it is essential to inform the DMV. For guidance on these changes, you can contact the occupational licensing number at 916-XXX-XXXX, which I will provide multiple times throughout this guide.

Dealer Surety Bond Requirements

Ensure that you complete the dealer surety bond form with your bonding agent or insurance representative. This form is crucial for obtaining your dealer surety bond. Here’s what you need to know:

• $50,000 Bond Form: This bond is required for all used motor vehicle dealers. Your insurance agent or bonding company representative must complete this form.
• $10,000 Bond Form: This bond is specifically for motorcycle dealers and wholesale dealers who sell fewer than 25 vehicles per year. Again, this must be completed by your insurance agent or bonding company representative.

Deposit Agreements as an Alternative to Bonds

Some dealers might prefer to make a deposit rather than obtaining a bond. For instance, if you opt out of getting a bond, you can deposit $50,000 into a bank account. This deposit can replace the need for a surety bond. However, it’s worth noting that most dealers choose the bond option due to the lower annual cost compared to tying up $50,000 in a bank account.

While this deposit agreement allows you to avoid a bond, remember that $50,000 in a bank account earns minimal interest compared to potential vehicle inventory profits. Additionally, the bank would hold the deposit as a security in case of legal judgments or claims against your dealership.