What is an Auto Dealer Bond?
Auto dealer bonds, or motor vehicle dealer bonds, are a type of license bond required by states in order to register and operate a motor vehicle dealership. The motor vehicle bond categories vary by state, and can include: new and used car dealer bonds, motorcycle dealer bonds, mobile home dealer bonds, boat dealer bonds, and more.
These bonds serve as financial guarantees that protect consumers and/or the state from losses due to unethical dealership business practices. Acts that might lead to a claim include: fraud, failure to transfer registration, tax and fee violations, providing false vehicle information, odometer tampering, failure to honor verbal or written warranties, utilizing deceptive financing methods, failure to report sales, or failure to follow the conditions of the state license.
How Quickly Can I Get the Bond?
Motor Vehicle Dealer bonds can usually be issued the same day all required information is submitted, but in some cases, it may take more than a day.
How Much Does It Cost?
The premium for each bond is determined by the following factors:
- Amount of the bond
- Length of time the bond is needed
- Credit scores of all owners
The amount required for the bond varies depending on the type of dealership and the state in which it operates, and can range anywhere from $10,000 to $100,000. Because various factors determine the premium, motor vehicle dealers will need to contact a surety agent for an accurate rate.
What Documents Will I Need?
To apply for a motor vehicle dealer or auto dealer bond, you will need an application form.
Contact us today and we can provide you with an application form, as well as answer any questions you may have. We’re here to help!
