Auto / MVD License Bond
Auto / MVD License Bond Information
An auto dealer surety bond is a binding contractual agreement between three parties: the obligee (the state requiring the bond), the principal (the auto dealer), and the surety (the provider of the bond). Listed below are the 3 absolutes in surety.
- Most be a US Citizen
- Cannot be in current bankruptcy
- Cannot be behind in child support
Auto / MVD License Bond agreement
It’s important not to confuse an auto dealer bond with insurance. Even though dealer bonds are sometimes wrongfully referred to as auto dealer bond insurance, they do not protect the dealer but the general public. Think of the bond as a line of credit extended to the dealership by the bonding company.
Simply put, auto dealer bonds are a way to compensate dealers' customers if they become victims of fraud or unethical business practices. These include (but are not limited to):
- Tampering with the odometer
- Providing false information about the vehicle’s condition
- Failure to honor oral or written warranties
- Engaging in deceptive financing methods, such as “yo-yo” financing
- Not paying state sales tax or other applicable fees
- Not reporting sales
- Failing to adhere by the conditions of their license type
A claim can be made on the dealer bond if the dealership doesn’t follow all applicable laws and regulations. If a legitimate claim is filed against the dealership, the surety will pay all relevant costs up to the amount of the surety bond it had underwritten. However, the dealer will have to reimburse these costs later on, which means avoiding claims is the best course of action.
Three party agreement
Surety Bond Definition: The definition of a surety bond is as follows: A surety bond is a binding agreement between three parties. This agreement sets forth a financial guarantee by one party ( “surety” ) to another party ( “obligee” ) that a third party ( “principal” ) will fulfill required obligations to the obligee, and that state, federal, and local laws and applicable regulations will be adhered to. Let’s examine each of the three parties.Learn more about surety bonds
Bad Credit – Fast Approvals – Lowest Rates Available.
- Credit below 650 and/or have blemishes on credit report.
- Average cost is 5-15% of the bond amount.
- Available for all commercial bonds.
Why does credit matter? Applying for a surety bond is similar to applying for a loan. You are asking a surety company to back you financially. Reviewing credit is the best method for the surety to understand their risk. All sureties review credit as a view only and should have no effect on your credit score. While it is true that bad credit makes it harder to obtain a competitive quote, we are committed to making sure all of our customers have access to the best possible rates. While we can’t guarantee that we can provide a bond for the most extreme bad credit situations, we strive to make sure no stone is unturned! In other words, if you are insurable, we will get it written. Contact us today and let us put together an online quote for you that will exceed your expectations.