If you’re a used car dealer in New York State your surety bonding requirements are about to change! Thanks to the New York Assembly Bill 8166 the state is about to bring in key changes that used car dealers need to be aware of. Although the bill passed in 2016, its influence will only begin on March 28, 2017, when the bill comes into effect.
The impact on used car dealers
The Bill will impact all used car dealers who operate in the New York state area. One of the key changes is the reduction of the sales threshold that is used to calculate the surety bond amount needed by each car dealer. The used car sales bond threshold is currently 200, meaning anyone who sells over 200 cars per year requires a larger surety bond than those who sell less than 200 cars per year. However, this threshold number is dropping to 50 cars per calendar year.
This new rule means that if your dealership sells less than 50 cars per year, you’ll now be required to take out a bond for $20,000. If you sell more than 50 cars per year, your bond amount will increase to $100,000. This is a big jump from the previous bond figures of $10,000 and $25,000.
Enforcement of the new bond requirements and other important changes
Bill 8166 will be enforced by the New York State Department of Motor Vehicles. In addition, the commissioner will check whether a dealer has the correct bond within 5 days of a cancellation or expiration of their previous bond. The bill will also impact surety providers, who will now be required to give the NY State DMV a sixty-day notice that a bond is due to expire. This notice is in addition to existing rules requiring the surety to notify the DMV of bond cancellations.
Obtaining a New York State used car dealer bond
The premium costs of bonds range from 1 to 3% of the bonded amount, making them one of the more affordable bond types. The cost of the bond can be impacted by your credit score and financial history of your business. Viking Bond Service is experienced in helping used car dealers get the bond they need. Visit our NY used car bond page for more information.