Who needs Motor Vehicle Dealer and Other Bonds?

This bond is typically required to get or renew a license to operate as a motor vehicle dealer. It may apply to businesses selling new or used vehicles and can also be required for related dealer types such as motorcycle, ATV, or franchise dealers, depending on your state’s licensing rules.

The bond is meant to protect customers, creditors, and government agencies if a dealer causes financial harm through fraud, unethical conduct, or failure to follow the rules tied to the dealer license. If a valid claim is paid, the dealer is responsible for paying the surety back for what was paid out.

How much do Motor Vehicle Dealer and Other Bonds cost?

You don’t pay the full bond amount. You pay a premium that is a percentage of the required bond amount. Pricing varies by state and is based on the bond amount your state requires and the rate you qualify for.

Premium rates commonly fall within a range of about 1% to 10%. Your rate is usually based on factors like your credit score, financial history, industry experience, and licensing history. Some states may also adjust the required bond amount based on how many vehicles a dealership sells during the year.

How do I get Motor Vehicle Dealer and Other Bonds?

Start by confirming the exact bond required for your dealer license in your state. The state sets the bond requirement, and a surety company issues the bond based on your application.

During the application process, the surety reviews information such as credit and financial background and may consider your experience and licensing history. Once approved and payment is made, the bond is issued so you can file it with the agency handling your dealer license (often the DMV or DOT).

Can I get Motor Vehicle Dealer and Other Bonds with bad credit?

Yes, bad credit does not automatically prevent you from getting an auto dealer bond. However, credit and financial history can affect the rate you’re offered, and applicants with lower credit scores may pay a higher premium than applicants with strong credit.

How fast can I get Motor Vehicle Dealer and Other Bonds?

Timing depends on how quickly the application can be reviewed and whether additional information is needed. In many cases, bonds can be issued quickly once the application is complete and payment is received, but processing time can vary by state requirements and underwriting review.

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