Who needs this bond?

Auto dealer bonds are required for businesses that sell, manufacture, or handle certain types of vehicles in Washington. If you are applying for or renewing a license through the Washington Department of Licensing (DOL) as a motor vehicle dealer, you will need this bond.

This includes businesses that sell new or used cars, trucks, or motor homes, as well as certain manufacturers and related vehicle businesses. The bond is a required part of the licensing process and must be in place before your dealer license can be issued or renewed.

The purpose of the bond is to protect customers, creditors, and the state. It ensures that your dealership operates according to Washington’s licensing laws. If a dealer violates those laws and causes financial harm, a claim can be made against the bond. Any paid claims must be repaid by the dealer.

How much does this bond cost?

The cost of your auto dealer bond depends on the required bond amount for your license type and your personal and business qualifications.

In Washington, the bond amount is set by the Department of Licensing and varies by license type. For example:

  • $30,000 bond for retail and wholesale dealers selling new or used cars, trucks, or motor homes
  • $40,000 bond for mobile home manufacturers
  • $20,000 bond for travel trailer manufacturers
  • $5,000 bond for certain vessel dealers and tow truck operators
  • $1,000 bond for vehicle wreckers

You do not pay the full bond amount. Instead, you pay a percentage of that amount as your premium. Most applicants pay between 1% and 3% of the total bond amount.

Your rate is based on factors such as credit history, financial background, industry experience, and licensing history.

How do I get this bond?

Getting your Washington auto dealer bond is a straightforward process:

  1. Complete a short bond application.
  2. The surety company reviews your credit and background information.
  3. You receive a quote based on your qualifications.
  4. Once you pay the premium, the bond is issued for filing with the Department of Licensing.

The bond is one part of the overall dealer licensing process. To obtain your auto dealer license in Washington, you must also:

  • Submit a completed vehicle dealer license application
  • Provide a criminal background check
  • Show proof of a commercial business location (such as a lease or property documentation)
  • Complete dealer education if required for your license type
  • Pay all required state licensing fees

Your business location must meet state requirements, including proper zoning, signage, a dedicated office space, a working phone number, and regular business hours. An inspection is typically completed before your license is approved.

Can I get this bond with bad credit?

Yes, you can still obtain a Washington auto dealer bond with bad credit.

While applicants with strong credit usually qualify for the lowest rates, having credit challenges does not automatically disqualify you. The surety company looks at the full picture, including financial history and experience in the industry.

If your credit score is lower, your premium may be higher, but options are still available in most cases.

How fast can I get this bond?

In many cases, auto dealer bonds can be approved the same day once your application is submitted.

Processing time depends on the completeness of your application and your credit profile. Straightforward applications are often handled quickly, allowing you to move forward with your license filing without unnecessary delays.

Are there any local requirements?

Auto dealer licensing and bond requirements are handled at the state level through the Washington Department of Licensing. However, your business location must meet local zoning and property requirements before your license will be approved.

This typically includes operating from a properly zoned commercial location with an enclosed office, visible signage, and established business hours. A state inspection is generally required before a license is issued.

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