How Does A California Motor Vehicle Dealer Surety Bond Work?
California Motor Vehicle Dealer Surety Bonds guarantee that the principal (vehicle dealer) complies with all applicable laws and regulations, including those established by the California Department of Motor Vehicles and the California Vehicle Code.
This bond also protects purchasers, sellers, finance agencies or government agencies from fraud or fraudulent representations committed by the principal in the course of business. If the principal does not comply with the terms of the bond, a claim can be filed with the surety company. If the claim is valid, the surety will pay up to the penal sum of the bond to resolve the claim. The principal is then required to reimburse the surety for all monies paid out, including any attorney fees incurred.