How To Get a California Car Wash License and Surety Bond
If you want to start a car wash business in California, you’ll first need to obtain a car wash registration from the state. One of the steps in the registration process is to obtain a California Car Wash Bond. While the licensing and bonding process isn’t necessarily difficult, there are several things to know before you get started. In this article, we will describe how to get your California car wash license and surety bond step-by-step.
What is a California car wash registration and why do I need one?
In California, any business that offers car washing or polishing services must first register with the Department of Industrial Relations, Division of Labor Standards Enforcement. A California car wash registration is sometimes (mistakenly) referred to as a license, don’t let that confuse you. At the state level, you only need to register your business. However, your local city or county governments may have other licensing requirements for your business, so be sure to research all regulations carefully.
According to California state law, businesses that offer washing, cleaning, drying, polishing, detailing, servicing, or otherwise providing cosmetic care to vehicles must have a car washing and polishing registration to operate within the law. This is true whether your business is a full-service car wash, self-service car wash, or mobile detailer. The car wash registration does not apply to businesses that only offer motor vehicle repair.
How to get a California car wash and polishing registration
Below, we outline the primary steps to follow to get your California car wash and polishing registration.
Determine if you are required to register your business. California requires any business that offers car washing or polishing services to register as a car wash, including full-service, self-service, and mobile detailers. It does not include any charitable, youth, service, veteran, or sports group, club, or association that conducts car washing and polishing intermittently to raise funds for charitable, educational, or religious purposes. It also does not apply to vehicle dealerships or car rental businesses.
Complete an application. You can find the California Car Wash and Polishing Registration application online, or you can call and request an application to be mailed to you. To complete the application, you will need to have your personal and business information, as well as information about all current employees.
Purchase a Car Wash Surety Bond. The state requires California car wash businesses to obtain a surety bond with a bond amount of $150,000. At South Coast Surety, applying for your bond quote is free and easy. We discuss more about this bond and how to get one below.
Gather and complete other required paperwork. In addition to your application, you will need to submit the following:
- Proof of worker’s compensation insurance
- Proof of compliance with local business licensing requirements (city and/or county)
- Tax Information Authorization form (IRS Form 8821)
- $300 registration fee for each location
Submit your completed application and documents. While you are able to submit your application online, you may need to send other completed paperwork and documents through the mail. You can send your documents to the California Division of Labor Standards Enforcement – Licensing and Registration Unit. It may take up to 45 days for the office to process your application.
What is a California Car Wash Bond?
We mentioned above that you have to get a car wash bond, but many people don’t fully know what that is or what it does. The California Car Wash Bond is a type of surety bond designed to protect the employees of a car wash business—not the owner.
Like most bonds, the California Car Wash Bond is a three-party contract between:
- The principal, which is the person or business that has to get the bond(you);
- The obligee, or the entity requiring the bond. In this case, the California Department of Industrial Relations, Division of Labor Standards Enforcement; and
- The surety company that writes and backs the bond.
Why do I need a car wash bond in California?
California is one of just a few states in the United States that requires car wash businesses with employees to obtain a car wash bond to operate legally. This state law is outlined in the California Labor Code.
The purpose of the car wash surety bond is to ensure that California car wash employees are paid in accordance with the law. If the car wash employer refuses or is unable to pay an employee’s wages or fringe benefits, the employee can file a claim against the bond. If the claim is valid, the surety company will compensate the employee the sums owed to them up to the bond amount of $150,000. The principal is financially obligated to reimburse the surety company for the entirety of the claim and any additional fees and expenses incurred. This is what differentiates a surety bond from other types of insurance.
How much does a car wash bond cost in California?
The required bond amount for a car wash business in California is $150,000. But that is not the amount you will pay for your bond! Instead, surety companies charge a bond premium, which is typically a percentage of the total bond amount.
To determine the cost of your bond, the surety company will primarily look at your credit (using a soft credit check) and business financials. Applicants with strong financials and excellent credit may see quotes starting around 1% of the bond amount.
To find out exactly how much your car wash bond premium will be, apply for a free quote from South Coast Surety.
Apply for your bond today
Getting your California Car Wash Bond is quick and easy when you apply online at SouthCoastSurety.com! Just fill out our short application to get started.
If you have questions, we encourage you to email us at firstname.lastname@example.org or call us at 949-361-1692. Our surety experts are here to help you get your bonding needs taken care of!
- In California, any business that offers car washing or polishing services must first register with the state’s Department of Industrial Relations, Division of Labor Standards Enforcement.
- To become registered you need to fill out an official application; purchase a $150,000 California Car Wash Bond; submit proof of worker’s compensation insurance, your local business license, a Tax Information Authorization Form, and a $300 registration fee per location.
- The California Car Wash Bond protects the employees of car wash businesses from financial loss due to non-payment of wages and benefits.
- For businesses with excellent credit and strong financials, California Car Wash Bond premiums may start as low as 1% of the bond amount.
- The best way to know how much you will pay for your car wash bond is to request a quote from South Coast Surety online.