Bonds and Business Records Flashcards

Which of the following transactions would trigger an obligation to file an updated bond with the DMV?

Answer: Increasing the dealer license category (e.g., adding wholesale to retail)

Adding a new license category often requires an updated or additional surety bond to reflect expanded dealer privileges.

How must a dealer store records that the DMV requires to be available for inspection?

Answer: At the licensed location or an approved off-site storage with DMV notification

Records must be kept at the licensed location or at an approved off-site storage facility, and the DMV must be notified of the off-site address.

A retail dealer's surety bond amount in California is set at a minimum of what amount (as of recent regulations)?

Answer: $25,000

California requires retail dealers to carry a surety bond of at least $25,000 to protect consumers.

What is the term 'obligee' referring to in the context of a dealer surety bond?

Answer: The state or party protected by the bond

The obligee is the party (typically the state) in whose favor the bond is written and who can make claims against it.

Which of the following is NOT typically required to be included in a dealer's business records file for each vehicle sold?

Answer: Dealer's personal tax return

A dealer's personal tax returns are not part of the vehicle transaction file required by the DMV.

If a surety bond claim is paid out to a consumer, what is the dealer's obligation to the surety company afterward?

Answer: Reimburse the surety company for the full amount paid

Unlike insurance, a surety bond requires the principal (dealer) to indemnify the surety for any claims paid on their behalf.

Which record helps the DMV verify that a dealer properly collected and remitted sales tax?

Answer: Buyer's order showing purchase price and tax collected

The buyer's order documents the sale price, taxes collected, and fees charged, allowing the DMV and BOE to verify proper tax collection.