MVD Surety Bonds
What is a dealer bond and why do I need one?
Motor Vehicle Dealer (MVD) Bond, also known as car dealer bonds, used car dealer bonds, or simply auto dealer bonds, guarantee that the car dealer manages the dealership according to the requirements of the state in which it is operating. Though the terms are commonly confused, motor vehicle dealer bonds differ from car insurance.
MVD bonds compensate customers should they become victims of fraud or unethical business practices. MVD Bonds are commercial license surety bonds. MVD Bonds, like all surety bonds, involve three parties:
One party is the principal, in this case the car dealer, who purchases the bond to prove that their business is trustworthy.
Another is the obligee. In this case the obligee can be the state, or the dealership’s customers, who can make claims against the bond if the dealer violates provisions of the bond. The third party in this agreement is the surety or an underwriter who issues the bond to the dealer.
We have excellent MVD bond programs for good credit as well as less than perfect credit. We can write MVD bonds for all 50 states with 24 hour (or less) approvals.
How do I apply for a dealer license and a bond?
Prior to receiving their motor vehicle dealer license, applicants typically have to provide a surety bond guaranteeing their dealership will comply with industry regulations. This type of license and permit bond goes by a variety of names from one state to another: automobile bond, car dealer bond, dealer bond, wholesale dealer bond, motor vehicle dealer bond, used car dealer bond, etc.
Regardless of the name, dealer bonds are used to protect consumers from fraud and other wrongful actions committed by dealerships and their employees. However, the exact protection an auto dealer bond provides depends on state and/or local laws.
If you’re ready to apply for your auto dealer bond, contact one of our surety specialists now! We can typically provide you with your free car dealer surety bond quote within one business day of receiving your application. You can also get started by contacting your local trade association, or department of motor vehicles for a list of requirements.
How much is a dealer bond and which type do I need?
This type of license and permit bond goes by a variety of names from one state to another: automobile bond, car dealer bond, dealer bond, wholesale dealer bond, motor vehicle dealer bond, used car dealer bond. However, the idea is the same, this bond type guarantees that the dealer will follow the rules and regulations set forth by the state. The type of bond you need will depend on what type of motor vehicles you wish to sell, how many motor vehicles you sell per year, and what state you are located in.
Highly qualified applicants could pay just 1% of the total bond amount when purchasing an auto dealer surety bond from SuretyBonds.com. Your exact premium is determined by an underwriter, who will consider the following factors:
- Amount of the bond
- Duration of the bond
- Personal credit for all owners with 10% or more ownership in the business
What is a bond claim, and how does my bond protect me as a dealer?
MVD bonds are meant to protect the public rather than the dealer. However, there are benefits to obtaining a surety bond that go beyond just meeting the legal requirements.
Should a claim be filed against your MVD bond, a surety will ensure that you have claims advocates fighting for your business during the investigation process.
With an MVD bond, the surety makes a substantial monetary guarantee on your behalf, and only requires you to pay a small percentage of the amount guaranteed.
Save Money on Your Auto Dealer Bond
allcommercialsurety.com is a surety agency that works with several of the largest providers in the industry, meaning we shop your bond with multiple underwriters until we find you the lowest available rate. Let us help you with your MVD bond so you can focus on selling motor vehicles.
We have excellent MVD bond programs for good credit as well as less than perfect credit. We can write MVD bonds for all 50 states with approvals in 24 hours or less.
We welcome dealers from trade associations around the country, including those listed below, to call us directly at (855) 997-4399.
- Independent Auto Dealers Association of California (IADAC)
- Florida Automobile Dealers Association (FADA)
- Texas Independent Automobile Dealers Association (TIADA)
- The Arizona Automobile Dealers Association (AADA)
- They New Jersey Coalition of Automotive Retailers (NJ CAR)
- The Greater New York Automobile Dealers Association (GNYADA)
- Utah Automobile Dealers Association (UADA)