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Motor Vehicle Dealer Bonds
Most of the time, a surety bond's purpose is to protect a consumer against damages due to fraud, defaulting on a contract, or other negative and wrongful behaviors on the part of a business providing a service or product. In some cases, a business opts to get a surety bond to prove that they are committed to ethical behavior; however, most of the time a bond is required by a government agency in order for a business to get a license to provide those services or products.
One example of an industry that is required by law to have surety bonds in place in order for a business to obtain a license is the motor vehicle dealership industry.
A motor vehicle dealer bond, sometimes also called a DMV bond, used car dealer bond, or auto dealer bond, guarantees that the motor vehicle dealer complies with all federal laws, state laws, local laws, and tax and judgment guidelines that relate to motor vehicles. 
The bond also ensures that if the dealer or any of its employees commits fraud or other actions that are wrongful to the consumer, the consumer is protected from any consequence arising from those actions.
In addition to the protection that a consumer receives from a motor vehicle dealer bond, they also find peace of mind knowing that a dealership has a surety bond in place. That surety bond means that a third party bonding company has reviewed that dealership's financial information and endorsed them as a financially stable company. And in the event that something does take a negative turn during the transaction between consumer & dealership, the bonding company can step in to make the situation better for the consumer.
Typically, dealers obtain their motor vehicle dealer bond by applying with a surety bond company. As part of the application process, the dealer provides financial documentation and agrees to submit to a credit check, so that the bond company can be sure that they are financially stable, can pay for bond premiums and cost, and are a reaonable dealership to provide a surety bond to.
A poor credit score on the record of the dealer will make getting a surety bond more difficult with many companies; however, at BondsExpress.com many of our motor vehicle dealer bonds have special programs available to applicants with poor credit scores.
We've helped hundreds of dealerships across the nation get their surety bond quickly and without hassle, and we'd love to help you with your surety bond requirements. Call us at 800-331-5453 or apply online today.
State Requirements For Motor Vehicle Dealerships
Please note that this information is not legal advice or counsel, and consulting with your attorney as to the specific legal requirements in your state is recommended.
Alabama MVD Bonds - A $10,000 Automobile Dealer Surety Bond is required, or a financial statement showing a net worth of at least $25,000. Dismantlers are also required to have a dealers bond, or a financial statement showing a net worth of $100,000 or more.
Alaska MVD Bonds - For all dealers except motorcycle dealers, a $10,000 Motor Vehicle Dealer bond is required. For motorcycle dealers, a $3,000 Dealer bond is required.
Arizona MVD Bonds - For all new and used car dealers that have established businesses, a $100,000 Motor Vehicle Dealer Bond is required for each location. A $25,000 Motor Vehicle Dealer bond is required for Wholesale Dealers.
Arkansas MVD Bonds - A $25,000 Motor Vehicle Dealer bond is required to be filed with the Arkansas Motor Vehicle Commission for Franchise Dealers to obtain a license. A $25,000 Motor Vehicle Dealer bond is required to be filed with the state police department for used car dealers to obtain a license.
California MVD Bonds - For new and used car dealerships, a $50,000 motor vehicle dealer bond is required. For wholesale dealers, a $10,000 Wholesale DMV Bond is required.
Colorado MVD Bonds - Upon application for license, a $30,000 Motor Vehicle Dealer Bond has to be posted.
Connecticut MVD Bonds - For new and used dealers, a $20,000 bond is required. For repairers and limited repairers, a $5,000 surety bond is required.
Delaware MVD Bonds - Currently, there are no requirements for motor vehicle dealers. As mentioned above, please consult with your attorney for any legal requirements that may not be listed here.
Florida MVD Bonds - A motor vehicle dealer bond in the amount of $25,000 is required to be filed by all motor vehicle dealers as well as by all mobile home dealers. In addition, for more than four additional lots, mobile home delears are required to file a $50,000 motor home dealers bond. RV dealers are required to file a $20,000 Department of Motor Vehicles bond. As a substitute for the motor vehicle dealer bond, an irrevocable letter of credit may be supplied.
Georgia MVD Bonds - All vehicle dealers are required to file a $35,000 automobile dealer bond.
Hawaii MVD Bonds - One of the following amounts has to be provided as an alternative form of security when an inventory flooring line of credit can't be obtained by a dealer. These amounts are:
a. $200,000 for new motor vehicle dealers that sell at least 10 vehicles per month, based on annual sales
b. $50,000 for new motor vehicle dealers that sell less than 10 vehicles per month, based on annual sales
c. $100,000 for used motor vehicle dealers that sell at least 60 vehicles per month, based on annual sales
d. $25,000 for used motor vehicle dealers that sell less than 60 vehicles per month, based on annual sales
e. $10,000 for motor scooter or motorcycle dealers
Idaho MVD Bonds - For motorcycle, snow machine, or ATV dealers, a $10,000 motorcycle dealer bond is required. For all other dealers, a $20,000 motor vehicle dealer bond is required.
Illinois MVD Bonds - For new & used vehicle dealers, a $20,000 motor vehicle dealer bond is required.
Indiana MVD Bonds - Effective July 1, 2009, Indiana House Bill 1376 mandates that Motor Vehicle Dealers will have to furnish proof that they have a $25,000 bond. This applies to new and existing dealers.
The bond requirement will take effect for existing auto dealers upon licensing renewal starting with July, 2009 renewal dates (July 31, 2009). The required amount is $25,000. The bond effective and expiration dates run concurrent with the license.
Iowa MVD Bonds - Dealer must file a $50,000 automobile dealer bond with the Department of Transportation.
Kansas MVD Bonds - All new and used dealers are required to file a $30,000 DMV bond.
Kentucky MVD Bonds - A motor vehicle dealer bond in the amount of $15,000 may be required by the state upon approval.
Louisiana MVD Bonds - New vehicle dealers must file a $20,000 motor vehicle dealer bond, and used vehicle dealers must file a $10,000 motor vehicle dealer bond.
Maine MVD Bonds - All dealers except for light boat and light trailer dealers are required to file a motor vehicle dealer bond. The amount of the bond is determined by the quantity of vehicles sold by the dealership.
For up to 50 vehicles sold, a $5,000 bond is required. For 51-100 vehicles sold, a $10,000 bond is required. For 101-150 vehicles sold, a $15,000 bond is required. For 151-200 vehicles sold, a $20,000 bond is required. For 201 or more vehicles sold, a $25,000 bond is required.
Maryland MVD Bonds - All vehicle dealers are required to file a bond, and the amount is based upon sales volume. Consult with the state department requiring the bond for your specific requirement.
Massachussetts MVD Bonds - All Class II dealers are required to have a $25,000 auto dealer bond effective January 1, 2004.
Michigan MVD Bonds - A motor vehicle dealer bond in the amount of $10,000 is required.
Minnesota MVD Bonds - All auto dealers must file a $50,000 motor vehicle dealer bond. Dealers for boats, trailers, motorized bicycles, and snowmobiles must file a $5,000 dealer bond.
Mississippi MVD Bonds - All licensed dealers must file a $15,000 Designated Agent's Surety Bond. Applications for a dealer's license must be accompanied by this bond.
Missouri MVD Bonds - A corporate surety bond in the amount of $25,000 is required.
Montana MVD Bonds - A $25,000 dealers bond must be posted by used car dealers, auto auctions, franchised dealers, recreational vehicle dealers, wholesalers and trailer dealers who sell house trailers, mobile homes, and commercial trailers. Trailer dealers and wholesalers who sell trailers weighing less than 6,000 pounds GVW as well as motorcycle dealers are required to post a $10,000 dealers bond.
Nebraska MVD Bonds - An automotive dealer bond in the amount of $25,000 is required.
Nevada MVD Bonds - A motor vehicle dealer bond in the amount of $100,000 is required.
New Hampshire MVD Bonds - A dealer bond from $10,000 to $20,000 is required, with "bonded" and "licensed" categories. Dealer plates are not issued to bonded dealers.
New Jersey MVD Bonds - A motor vehicle dealer bond in the amount of $10,000 is required, and has a term date of April 1 through March 31.
New Mexico MVD Bonds - Auto dealers, motorcycle dealers, salvage dealers, mobile home dealers, and manufacturers are required to post a $50,000 coporate surety bond. Boat dealers are not required to file a bond. A bond in the amount of $12,500 is required for motorcycle dealers.
New York MVD Bonds - All motor vehicle dealers are required to have a bond. Dealers must have a $10,000 or $25,000 bond; qualified dealers must have a $50,000 bond; and new motor vehicle dealers must have a $50,000 bond.
North Carolina MVD Bonds - A motor vehicle dealer indemnity bond in the amount of $50,000 is required.
North Dakota MVD Bonds - A $25,000 motor vehicle dealer bond is required to be maintained by motor vehicle dealers with the licensing department of the state. A $10,000 bond must be maintained by motorcycle dealers and mobile home trailer dealers.
Ohio MVD Bonds - In certain situations, automobile dealer bonds are required. Consult with the local department of motor vehicles.
Oklahoma MVD Bonds - For used car dealers, a $15,000 used car dealer bond is required. For wholesale dealers, a $25,000 wholesale dealer bond is required. For manufactured home dealers, a $30,000 manufactured home dealer bond is required. Licensed sales representatives are required to maintain a salesperson dealer bond in the amount of $1,000.
Oregon MVD Bonds - A DMV bond is required to be maintained on a 3-year license in the amount of $40,000. This policy is effective as of September 1, 2004.
Pennsylvania MVD Bonds - For manufacturers and dealers, a $20,000 DMV bond is required for each place of business. For messenger service, a $50,000 DMV bond is required for each branch office. For a full agent, a $30,000 DMV bond is required for each place of business. For salvor, a $10,000 DMV bond is required for every place of business. For a card agent, a $3,000 DMV bond is required.
Rhode Island MVD Bonds - A $15,000 motor vehicle dealer bond has to be posted with the Dealers License Commission by all dealers.
South Carolina MVD Bonds - A motor vehicle dealer bond in the amount of $30,000 is required.
South Dakota MVD Bonds - For motorcycle dealers, a $5,000 dealer bond is required. For trailer dealers, a $10,000 dealer bond is required. For manufactured or mobile home dealers, a $25,000 dealer bond is required. For snowmobile dealers, a $5,000 dealer bond is required. For boat dealers, a $20,000 dealer bond is required. For new and used car dealers, a $25,000 motor vehicle dealer bond is required.
Tennessee MVD Bonds - A motor vehicle dealer bond in the amount of $25,000 is required to be filed with the Motor Vehicle Dealer Commission.
Texas MVD Bonds - A motor vehicle dealer bond in the amount of $25,000 is required for the licensed period, ending with the month previous. This applies to motor vehicle dealers, motorcycle dealers, wholesale dealers, and wholesale auction dealers.
Utah MVD Bonds - For new and used dealers, a corporate surety bond in the amount of $75,000 must be filed. A corporate surety bond in the amount of $1,000 must be filed for new or used motorcycle dealers or for small trailer dealers.
Vermont MVD Bonds - Dealer bonds must be provided by new and used car dealers. Dealer bonds are based on sales numbers and must have value in real estate of between $5,000 and $15,000. Contact your local office for more details.
Virginia MVD Bonds - For the first three years in business, a dealer must have a $25,000 automobile dealer bond. Once a dealership has had three years consecutively without a claim against the bond, the bond is no longer required.
Washington MVD Bonds - Dealer bonds of $30,000 are required for motor vehicle dealers, motor vehicle wholesalers, trailer dealers, and manufactured or mobile home dealers.
West Virginia MVD Bonds - Dealer bonds of $10,000 are required for dealer licensing. For aa-auto auction and Is-license service, a motor vehicle dealer bond in the amount of $25,000 is required. This bond is not required for mfg-manufacturer, trs-transporter, or repo-financial institution.
Wisconsin MVD Bonds - For a retail license, a $50,000 MVD bond is required. For a wholesale dealer, a salvage dealer, or recreational vehicle dealers, a $25,000 MVD bond is required. For a moped dealer, a $5,000 moped bond is required. For a motorcycle dealer, a $5,000 motorcycle bond is required.
Wyoming MVD Bonds - At the time of application for a license, a $25,000 automobile dealer bond is required.
