Which authority requires used car dealers to maintain bonds?

Used car dealers are required to maintain bonds as part of their licensing process, and this requirement is specific to state-level regulations. In California, the DMV mandates that dealers obtain a seller's bond to ensure financial responsibility and compliance with the law. This bond serves as a safeguard for consumers, allowing them to seek compensation if the dealer engages in unethical practices or breaches contract obligations.

While other entities, such as local government agencies or consumer protection organizations, may oversee or influence practices within the automotive sales industry, it is the California DMV that specifically outlines the bonding requirements for used car dealers within its regulatory framework. The bond must typically be established at the time of application or license renewal and is a crucial element for maintaining operational legitimacy in the state.