Who needs a Motor Vehicle Dealer Surety Bond?
Motor vehicle dealers in most states are required to file a Motor Vehicle Dealer Surety Bond with the state’s Department of Motor Vehicles (DMV) before their dealer license can be issued. Depending on the state, this surety bond goes by many names including automobile bonds, car dealer bonds, wholesale dealer bonds and used car dealer bonds.
What is the purpose of a Motor Vehicle Dealer Surety Bond?
These license and permit surety bonds are established as a safeguard against potential acts of fraud and ensure that the motor vehicle dealer complies with all laws and regulations. Fraudulent actions made on behalf of the auto dealer, such as the misrepresentation of a vehicle and its condition, can potentially result in significant losses for the pertinent buyer, seller, financing organization or government agency. This surety bond helps these entities recover from any resulting financial loss.
How much does a Motor Vehicle Dealer Surety Bond cost?
Pricing for Motor Vehicle Dealer Surety Bonds vary, but well qualified applicants could pay just 1% of the total bond amount. An underwriter will review your application and your premium will be based on the following factors:
- The state requiring the bond
- Amount of the bond
- Term length of the bond
- Personal credit for all owners with at least a 10% ownership stake in the business
Pacific Surety offers industry low rates and can obtain approvals for almost all credit situations. Once our simple application has been completed, we can have pricing to you within hours. If you have any specific questions, please contact our knowledgeable underwriting staff.