As with most surety bond types, auto dealer bond rates, as a percentage of the bond amount, are dependent on the qualification of the principal. The cost is determined by the surety quoting the bond. A surety will review an auto dealer bond request and make an assessment of the potential risk of writing the bond. If the assessed potential risk is within that surety’s tolerance thresholds, the surety will provide a quote indicating the premium and terms required for them to write the bond.
Auto dealer bond rates vary greatly due to the wide range of qualification characteristics of the principals getting bonded. When a surety reviews a quote request, the principal’s credit and in some cases, financial standing, are taken into consideration. Once a principal has been qualified by a surety, the surety can put a quote together with a rate base on the principal’s qualification and the surety’s filed rates.
The typical range for auto dealer bond quotes is from 2% - 15% of the bond amount. The range is wide and depending on the principal’s qualifications, the rate can be higher or lower than the stated typical range. For an auto dealer bond in the same state for the same amount, a principal with great credit would likely receive a better rate than a principal with marginal to poor credit.
Poor credit is not usually a barrier to getting an auto dealer bond. Quotes are still available with poor credit. These quotes are often higher than they would be with clean credit and may require collateral.
Quotes are available for clients with low credit. In many cases, a bond is not out of reach simply due to bad credit.