An auto dealer bond works as an extra level of protection for car buyers across the U.S. It’s a safe financial mechanism that guarantees you will follow the law in your work as a car dealer.
The bond is required by the authorities that license auto dealers in your particular location.
All types of dealers may need an auto dealer surety bond, depending on the licensing requirements of state or local authorities.
This means you are likely to need a bond if you fit into any of the following categories of dealers:
The cost of your car dealer surety bond is determined by how strong your personal and business finances are. Your personal credit score has the biggest impact on the price.
Your surety bond cost is a percentage of the bond amount you’re required to obtain by the licensing authorities. Applicants with credit scores of 650 and above can expect a bond premium between 1% and 3% of the bond amount.
The table below lists some of the most common dealer bonds that we sell. For each bond, you can check out the bond amount and the respective starting bond price:
|Auto Dealer Bond Cost Table
|State and Dealer Type
|California retail vehicle
|California motorcycle, all-terrain and wholesale
|Utah new or used motor vehicle or large trailer
|Utah motorcycle or small trailer
|North Carolina new or used dealer and auto recycler
|Arizona broker, wholesale auto auction dealer, and wholesale motor vehicle dealer
|Arizona new and used dealer and public consignment auction dealer
|Florida auto dealer bond
|Texas auto dealer bond
The bond provides protection to your customers in a range of situations.
The most common cases when the bond coverage can be activated include:
In such situations, a harmed client or other parties can file a claim against the auto dealer bond to demand fair compensation.
Here’s how to obtain your dealer bond in a few easy steps:
Bad credit can be a serious hamper to getting bonded. The reason is that your credit score is one of the main factors in the bond cost formation.
At our family-run surety agency, we know that it’s difficult to run a dealership when you’re facing financial issues. That’s why we offer dealers the ability to obtain the necessary bond even if they’re struggling with bad credit by opting to set-up convenient payment plans.
The licensing process for dealers across the country varies because it’s set by different licensing authorities on the state or local level.
You’ll typically have to provide a set of documents, including: