Every California dealer carries a surety bond, and Vehicle Code §11711 gives people harmed by the dealer's fraud, certain Vehicle Code violations, or non-payment for a vehicle a right of action against the dealer and the bond's surety. In practice you get the dealer's bond information from DMV's Occupational Licensing Unit, send the surety company a written claim with your documents, and, separately, file a written complaint with DMV Investigations. Recovery from the bond can't exceed the value of the vehicle involved, and DMV itself can't recover money for you.
Educational information only. This article is not legal or financial advice. For a significant loss, talk to a California attorney.
In this article
- What the bond covers
- Step by step
- What DMV can and can't do
- For dealers: why claims matter to you
- Frequently asked questions
What the bond covers
| Covered under VC §11711(a) | Limit |
|---|---|
| Fraud or fraudulent representation by the dealer or its salesperson | Up to the value of the vehicle bought from or sold to the dealer |
| A dealer's or salesperson's violation of Division 3 of the Vehicle Code (registration and titling) | Same |
| Non-payment for a vehicle sold to and purchased by a licensee | Same |
Claims by the state (for example, unpaid fees or sales tax) are paid first, and among private claims, people who aren't licensees are paid before licensees (VC §11711(d)–(e)). The bond is $50,000 for most dealers, and claims share that total.
Step by step
- Try to resolve it with the dealer in writing. DMV asks you to do this first, and it builds your record.
- Get the bond information. Call DMV's Occupational Licensing Unit at (916) 229-3126 (Monday–Friday, 8 a.m.–5 p.m.) for the dealer's bond and surety details, including for dealers that have gone out of business.
- Send the surety a written claim. Include the contract, receipts, title or registration papers, your written communication with the dealer and a clear dollar amount. Keep copies.
- File a DMV complaint. Complete the Record of Complaint (INV 172A), attach photocopies, not originals, and mail it to the DMV Investigations office closest to where the sale happened.
- Go to court if needed. The statute gives a right of action against the dealer, salesperson and surety. Small claims court or a private attorney is how you pursue money damages.
What DMV can and can't do
| DMV can | DMV can't |
|---|---|
| Investigate licensed dealers | Recover money or property for you |
| Take criminal or administrative action against a licensee | Force a dealer to take back a car after you signed |
| Keep your complaint on file if an investigation opens | Give legal advice or settle contract disputes |
Source: DMV publication INV 172, Problems With a Vehicle Purchase? Can DMV Help Me?
For dealers: why claims matter to you
From experience (Garrett Eddings, professional opinion): The bond isn't insurance for you. It protects your customers. If the surety pays a claim, you pay the surety back, and a claim history makes your next bond more expensive. The cheapest way to handle bond claims is to never earn one: transfer titles on time, disclose everything in writing and pay for what you buy.
See How much does a $50,000 dealer bond cost? and the bond and insurance guide.
Frequently asked questions
Who can file a claim against a California dealer bond?
A person who suffers a loss from the dealer's or salesperson's fraud, a Division 3 Vehicle Code violation, or non-payment for a vehicle sold to the dealer. The state can also recover through DMV.
How much can you recover from a dealer bond?
No more than the value of the vehicle involved, and all claims share the bond amount, usually $50,000. State claims are paid first.
Will DMV get my money back?
No. DMV can investigate and discipline the dealer, but money damages come through the surety or the courts.
Related questions
- How much does a $50,000 dealer bond cost?
- Can a dealer take a car back after you signed?
- How do you look up a dealer license number?
- Back to the California Dealer License FAQ
Resources
- California Vehicle Code §11711 (Opens in new window)
- DMV: Problems with a vehicle purchase? Can DMV help me? (INV 172) (Opens in new window)
- DMV Record of Complaint (INV 172A) (PDF opens in new window)
- DMV Investigations Division offices (Opens in new window)
- State Bar of California: Certified Lawyer Referral Services (Opens in new window)
Sources: Vehicle Code §11711(a)–(e) · DMV INV 172 (bond information line, complaint process, what DMV can't do). Verified 2026-10-16.
This article is for educational purposes only and is not legal or financial advice. California Dealer Academy can't evaluate individual claims. Contact a licensed California attorney about your situation. The instructor note reflects one instructor's professional opinion.