Who needs Delaware Auto Dealer Bonds?
Anyone applying for a Delaware motor vehicle dealer license must obtain this bond as part of the licensing process. This includes retail dealers and wholesalers who plan to buy, sell, or exchange vehicles in the state.
The Delaware Division of Motor Vehicles requires the bond before issuing or renewing a dealer license. It is one of several steps in the licensing process, along with submitting the dealer application, providing proof of a Delaware driver’s license and residency, obtaining a Delaware business license, passing a background check, securing zoning approval, maintaining liability insurance, and passing a DMV inspection of your business location. Dealer licenses expire each year on December 31 and must be renewed annually.
How much do Delaware Auto Dealer Bonds cost?
Delaware requires a $25,000 auto dealer bond. You do not pay the full bond amount. Instead, you pay a percentage of that amount as your premium.
Most dealers pay between 1% and 3% of the bond amount per year, depending on credit and financial history. The exact cost is determined after reviewing your credit profile, financial background, industry experience, and licensing history.
How do I get a Delaware Auto Dealer Bond?
Getting a Delaware auto dealer bond is a straightforward process:
First, complete a short bond application. The surety company will review your credit and background information to determine your rate. Once approved, you pay the quoted premium and receive your bond for filing with the Delaware DMV.
The bond must be in place before your dealer license can be issued or renewed.
Can I get a Delaware Auto Dealer Bond with bad credit?
Yes, you can still obtain a Delaware auto dealer bond with less-than-perfect credit. Your credit score is one of the main factors used to determine your rate, but it does not automatically disqualify you.
Applicants with lower credit scores may pay a higher percentage of the bond amount, but options are available for most credit situations. The best way to know your rate is to submit an application for review.
How fast can I get Delaware Auto Dealer Bonds?
In many cases, bond quotes are available the same day you apply. Once payment is made, the bond can typically be issued quickly so you can move forward with your dealer license application or renewal without delay.
Are there any local requirements?
In addition to obtaining the bond, Delaware dealers must meet DMV business location requirements, including proper zoning approval, required signage, liability insurance, and a successful inspection of the dealership location. These requirements must be satisfied before your license is approved.
If a dealer violates Delaware motor vehicle laws or DMV regulations, a claim can be filed against the bond. If a valid claim is paid, the dealer is responsible for reimbursing the surety company for the amount paid out.
If you’re unsure which bond you need, BOSS Bonds can review your licensing paperwork and help identify the correct bond at no cost.
