Who needs this bond?

Auto dealers in Minnesota must file a surety bond as part of the licensing process through the Minnesota Department of Public Safety. This applies to businesses that sell new or used motor vehicles as well as certain smaller vehicle dealers, such as those selling snowmobiles, small horse trailers, motorized bicycles, and mopeds.

The bond is required before your dealer license can be approved or renewed. It is a condition of legally operating as a dealership in the state.

This bond helps protect customers, creditors, and the state. It provides financial protection if a dealer violates licensing laws, engages in misconduct, or fails to follow state regulations. If a valid claim is paid, the dealer is responsible for repaying the bonding company for the amount paid out.

How much does this bond cost?

The required bond amount depends on the type of dealership license you are applying for. Minnesota requires one statewide bond amount for new and used motor vehicle dealers and a lower statewide bond amount for certain small-vehicle dealers.

You do not pay the full bond amount. Instead, you pay a percentage of that amount as your annual premium. Most Minnesota auto dealers pay between 1% and 3% of the required bond amount per year.

Your exact rate is based on factors such as your personal credit, financial background, industry experience, and licensing history. Strong credit typically results in lower rates.

How do I get this bond?

Getting your Minnesota auto dealer bond is a straightforward process:

  • Complete a short bond application
  • Provide basic business and personal information
  • Receive a quote based on your qualifications
  • Pay the premium
  • File the bond with the Minnesota Department of Public Safety as part of your license application

The bond must be submitted along with the rest of your dealer license paperwork. In addition to the bond, you will need to complete the dealer license application, provide proof of liability insurance, maintain an approved commercial location with required signage and display space, meet zoning requirements, and pay the required state fees.

Can I get this bond with bad credit?

Yes, it is still possible to obtain a Minnesota auto dealer bond with less-than-perfect credit.

While applicants with strong credit usually qualify for the lowest rates, many dealers with low credit scores or past financial challenges are still approved at higher premium rates. Your credit is one factor among several, and bonding companies also consider your overall financial profile and experience.

How fast can I get this bond?

Most Minnesota auto dealer bonds can be issued quickly once your application is submitted and approved. In many cases, you can receive a quote the same day, and the bond can often be issued shortly after payment is made.

Starting the bond process early can help prevent delays in your dealer license approval or renewal.

Are there any local requirements?

The bond is required statewide by the Minnesota Department of Public Safety. However, dealer licensing also involves meeting local zoning rules and maintaining an approved commercial location with proper signage and display space.

Before applying, you should confirm that your business location complies with local zoning and municipal requirements, as this is part of the overall dealer licensing process.

If you’re unsure which bond you need, BOSS Bonds can review your licensing paperwork and help identify the correct bond at no cost.