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Auto Dealer Bond

Auto Dealer bond

In most states, an auto dealer bond is required when seeking licensure to operate an auto dealership or other type of motorized vehicle dealership. Typically, this bond is required as part of the auto dealer vehicle registration process. Let's take a closer look at auto dealer bonds and how they can help you run a successful motor vehicle dealer business.

What is an Auto Dealer Surety Bond?

The auto dealer bond is a license surety bond that serves to protect the public by providing a path for recourse in situations where an auto dealer does not adhere to the laws, rules, and regulations of the state or governing body requiring the bond. Auto dealer bonds may also be referred to as a motor vehicle dealer bond.

To understand how these types of surety bonds work, let's look at the three parties involved:

  • The obligee is the entity, agency or individual that requires the bond. It is usually the state in which you plan to have your dealership, requiring it in the interests of their citizens.
  • The principal is the one who needs surety bond coverage. This is you, the auto dealer, in this case.
  • The surety serves as the underwriter of the auto dealer bond. Viking Bond Service, Inc. is your surety of choice, no matter what state you're in.

These three parties work together to ensure that motor vehicle dealerships operate in a way that provides peace of mind to the public.

Types of Auto Dealer Bonds

Depending on the type of dealership you plan to run, you may need to file one of several bond types, including:

  • RV bonds
  • Used car dealer bonds
  • Wholesale dealer bonds
  • Motorcycle dealer bonds
  • MVD bonds

All these bonds generally operate in the same basic way. If a dealer commits fraud or conducts unethical business practices, the wronged party (which can include a customer, the bank, or the government agency that provided the license) can make a claim and receive compensation from the surety company.

Car dealership bond amounts vary depending on the state where the bond is required, the classification of the motor vehicle dealer license being acquired, and the number of units sold previously or projected to be sold. If you require this surety bond to operate your business, you typically have to maintain it for as long as the license is to remain enforced. These bonds are annually renewable.

No matter what type of auto dealer bonds you need to get your business off the ground, Viking Bond Service has got you covered. Rely on us to provide you with fast quotes for all the different surety bond types listed above. We are also happy to answer all your questions about auto dealer bonds in any state, so please contact us at your convenience.

Who Needs an Auto Dealer Surety Bond?

As a general rule of thumb, anyone who plans to sell automobiles or other motorized vehicles as a career or as a substantial source of income will need one of these bonds because they will also need a license. Failure to obtain the bond makes it impossible to get a license, just as a lapse in bond coverage will invalidate the license. There can be strict penalties for operating without a license – including permanent loss of license – so anyone who needs an auto dealer bond should seek one out ASAP.

Why Are Auto Dealer Bonds Required?

A motor vehicle dealer bond is designed to protect the state and potential customers from dealerships that commit fraud. Sureties scrutinize the principal being bonded to assess the potential risk of bonding the individual or company. This gives potential customers peace of mind while adding credibility to your dealership in the eyes of the state agency.

Furthermore, if a motor vehicle dealer violates state laws and codes of conduct in ways that result in damages to the auto-buying public at large, the bond holds the motor vehicle dealer accountable by requiring them to pay for claims filed against the bond.

In regard to those claims, they also provide an important mechanism for people harmed by disreputable auto dealers to seek justice and receive compensation, which would otherwise require going through the courts. Auto dealer bonds are an effective way to regulate the entire auto industry. That's why they're required.

What Does an Auto Dealer Bond Cover?

An auto dealer bond covers damages related to illegal acts committed by a motor vehicle dealer. Every state has different laws that apply to the conduct of motor vehicle dealers, but all of them prohibit duplicitous behavior. One example would be selling a car that has had the odometer rolled back to imply it has fewer miles than it really does.

States also prohibit dangerous behavior, like selling a vehicle that has a known hazardous defect. For anyone who needs to get an auto dealer bond, you should take a careful look at the state laws governing auto sales to avoid triggering a claim for something you didn't know was prohibited.

How Much Do Auto Dealer Surety Bonds Cost?

Since there are many factors that go into determining the premium price on an auto dealer bond, there is no fixed amount that a surety charges. Different states have different bond requirements and variables like your credit, bonding history, and business type can affect the premium.

The surety assesses the likelihood of a claim being made and charges a percentage of the bond amount accordingly. The typical price quoted for these bonds nationally is anywhere from 1% to 5% of the required bond amount. Quotes can and do come in both lower and higher than that range though. Credit standing has an effect on the pricing of the bond so usually, the better the credit, the better the quote will be.

Viking Bond Service, Inc is committed to providing surety opportunities to businesses of all types. For those with mixed credit backgrounds, we offer a poor credit surety bond program and we work to offer the lowest premiums possible to all of our clients. No matter what your surety bond needs are, our auto dealer surety bond experts are happy to help you every step of the way. We cannot guarantee you will be approved for a bond. That being said, if you have been turned down for a surety bond elsewhere, we encourage you to apply with us instead. We take great pride in getting more people approved for the bonds they need, whether auto dealer bonds or otherwise.

Whether you're new to getting licensed or an experienced auto dealer, Viking Bond Service, Inc. is your superior surety solution. As a surety bond industry leader, we can handle any sized project in a way that other auto dealer bond surety providers can't match. No wonder auto dealers across the country choose us as their long-term bond partner. Discover what so many others already have: Viking Bond Service makes bonding simple and stress-free. Reach out to one of our experts to see the difference for yourself!

How to Get an Auto Dealer Bond

It's simpler to get an auto dealer bond than you might expect. Before getting started, keep in mind that you will need to get information from anyone who has an ownership stake in the business. You may also need to find information or secure documentation that you don't have immediately on hand – another reason it's important to get the bonding process started sooner rather than later. Once you're ready to seek out an auto dealer bond, prepare to meet these requirements:

  1. Fill out a standard bond application with information about your financial situation, background, and business.
  2. Submit to a credit check.
  3. Supply a copy of the surety bond requirements.
  4. Give the surety any other documents it requests.

Underwriters will use the application information to quote a price for the auto dealer bond. Bond coverage activates once the premium has been paid. The surety will then supply a document to prove bond coverage.

How to Renew an Auto Dealer Bond

Most auto dealer bonds need to be renewed every 12 months. If the bond lapses, it invalidates the auto dealer's license, which makes it illegal to continue selling vehicles. For all intents and purposes, a motor vehicle dealer needs to have a bond throughout every minute his business is open, which means keeping it renewed and never allowing it to lapse. Renewal works very similarly to the initial application.

You will first fill out a new bond application with updated details about your business and finances. You will then undergo a credit check. Underwriters will adjust the premium price up or down based on what they discover about changes to your credit standing since the last bond renewal. Paying the new premium renews the bond for another 12 months. Viking Bond Service takes a proactive approach – reminding you early and often that your auto dealer bond needs to be renewed, then making that process fast and easy.

Why Choose Viking Bond Service

Viking Bond Service writes auto dealer surety bonds nationwide. We provide competitive quotes for both good credit and bad credit clients. Thanks to a streamlined processing system and a knowledgeable technical staff, turnarounds are quick, giving us more time to focus on helping and informing our clients and agents. For instance, a quote will typically take under 24 hours to obtain after receiving the surety bond application.

Viking Bond Service works with many markets, and we approve nearly all requests sent to us. Those who wouldn't traditionally qualify for a bond due to financial deficiencies or bad credit can apply to special programs to receive surety bonds. If you have questions or would like to apply for a motor vehicle surety bond today, please apply online or contact us through our form or by calling us at 1-877-278-7389.

(See Also: Cost Expectations for Auto Dealer Bonds)

Request a Motor Vehicle Dealer Bond Quote:

How much would an auto dealer bond cost you? Get a free quote at any time by filling out this form – requesting a quote does not obligate you to purchase a bond. If you have questions, we're happy to answer them. Contact us at your convenience, or call us at 1-888-2-SURETY (1-888-278-7389).

Motor Vehicle Dealer Bonds by State:



  • Alabama New Motor Vehicle Dealer Bond
  • Alabama Used Motor Vehicle Dealer Bond


  • Alaska Motor Vehicle Dealer Bond
  • Alaska Motorcycle-Only Dealer Bond


  • Arizona New/Used Motor Vehicle Dealer Bond, Arizona Consignment Auction Dealer Bond
  • Arizona Vehicle Broker Bond, Arizona Wholesale Auto Auction Dealer Bond, Arizona Wholesale Motor Vehicle Dealer Bond
  • Arizona Automotive Recycler Bond


  • Arkansas Auto Dealer Bond, Arkansas Truck Dealer Bond, Arkansas RV Dealership Bond
  • Arkansas Motorcycle Dealer Bond, Arkansas ATV Dealer Bond, Arkansas Scooter Dealership Bond, Arkansas Lessor Bond


  • California Motor Vehicle Dealer Bond
  • California Motorcycle Dealer, California Motorcycle Lessor-Retailer Bond, California All-Terrain Vehicle Dealer Bond, California Wholesale-Only Dealer Bond


  • Colorado Motor Vehicle Dealer Bond


  • Connecticut New/Used Car Dealer Bond
  • Connecticut General/Limited Repairer Bond


  • Delaware Motor Vehicle Dealer Bond
District of Columbia

District of Columbia:

  • District of Columbia New Motor Vehicle Dealer Bond
  • District of Columbia Used Motor Vehicle Dealer Bond


  • Florida Motor Vehicle Dealer Bond, Florida Mobile Home Dealer Bond
  • Florida Recreational Vehicle Dealer Bond


  • Georgia Used Motor Vehicle Dealer Bond


  • Hawaii Motor Vehicle Dealer Bond
  • Hawaii Motorcycle Dealer Bond, Hawaii Scooter Dealer Bond


  • Idaho Motor Vehicle Dealer Performance Bond
  • Idaho Motorcycle Dealer Bond, Idaho All Terrain Vehicle Dealer Bond, Idaho Utility Type Vehicle Dealer Bond, Idaho Snow Machine Dealer Bond


  • Illinois Motor Vehicle Dealer's Bond


  • Indiana Motor Vehicle Dealer Bond


  • Iowa Motor Vehicle Dealer Bond


  • Kansas New/Used Motor Vehicle Dealer Bond, Kansas Auction Vehicle Dealer Bond, Kansas Salvage Vehicle Dealer Bond, Kansas RV Broker Bond, Kansas Motor Vehicle Converter Bond


  • Kentucky Auto Dealer Bond


  • Louisiana Used Motor Vehicle Dealer Bond


  • Maine Motor Vehicle Dealer Bond


  • Maryland New Motor Vehicle Dealer Bond, Maryland New Motorcycle Dealer Bond, Maryland New Emergency Vehicle Dealer Bond
  • Maryland Used Vehicle Dealer Bond, Maryland Wholesale Vehicle Dealer Bond, Maryland Used Motorcycle Dealer Bond, Maryland Used Emergency Vehicle Dealer Bond
  • Maryland Trailer Dealer Bond
  • Maryland Title Service Bond
  • Maryland Vehicle Manufacturer Bond, Maryland Second Stage Vehicle Manufacturer Bond, Maryland Vehicle Distributor Bond, Maryland Factory Branch Bond


  • Massachusetts Used Motor Vehicle Dealer Bond


  • Michigan New/Used Motor Vehicle Dealer Bond, Michigan Motor Vehicle Broker Bond


  • Minnesota Motor Vehicle Dealer Bond
  • Minnesota Boat Dealer Bond, Minnesota Snowmobile Dealer Bond, Minnesota Small Horse Trailer Dealer Bond, Minnesota Motorized Bicycle Dealer Bond


  • Mississippi Motor Vehicle Dealer Bond


  • Missouri Motor Vehicle Dealer Bond, Missouri Powersport Dealer Bond, Missouri Boat Dealer Bond, Missouri Trailer Dealer Bond, Missouri Emergency Vehicle Dealer Bond
  • Missouri Special Event Motor Vehicle Auction Bond


  • Montana Motor Vehicle Dealer Bond
  • Montana Street Legal Motorcycle or Quadricyle Dealer Bond
  • Montana Snowmobile Dealer Bond, Montana Non Street Legal Motorcycle or Quadricycle Dealer Bond, Montana Boat Dealer Bond


  • Nebraska Motor Vehicle Dealer Bond


  • Nevada Motor Vehicle Dealer Bond
  • Nevada Utility or Boat Trailer Dealer Bond, Nevada Horse Trailer Dealer Bond, Nevada Motorcycle Dealer Bond
New Hampshire

New Hampshire:

  • New Hampshire Motor Vehicle Dealer Bond
New Jersey

New Jersey:

  • New Jersey New/Used Car Dealership Bond
New Mexico

New Mexico:

  • New Mexico Motor Vehicle Dealer Bond
  • New Mexico Motorcycle Only Dealer Bond
New York

New York:

  • New York New Motor Vehicle Dealer Bond
  • New York Used Motor Vehicle Dealer Bond
North Carolina

North Carolina:

  • North Carolina Motor Vehicle Dealer Bond
North Dakota

North Dakota:

  • North Dakota Motor Vehicle Dealer Bond


  • No Bond Requirement


  • Oklahoma Used Car Dealer Bond


  • Oregon Motor Vehicle Dealer Bond
  • Oregon Exclusive Motorcycle, Moped, Class 1 All Terrain Vehicle, Snowmobile Dealer Bond


  • Pennsylvania Motor Vehicle Dealer/Full Agent Bond
Rhode Island

Rhode Island:

  • Rhode Island Motor Vehicle Dealer Bond
South Carolina

South Carolina:

  • South Carolina Original Motor Vehicle Dealer Bond, South Carolina Motor Vehicle Wholesaler Bond
  • South Carolina Motorcycle Dealer Bond, South Carolina Travel Trailer Dealer Bond, South Carolina Wholesale Auto Auction Bond
South Dakota

South Dakota:

  • South Dakota Motor Vehicle Dealer Bond, South Dakota Used Motor Vehicle Dealer Bond, South Dakota Mobile/Manufactured Home Dealer Bond, South Dakota Final Stage Manufacturer Bond
  • South Dakota Motorcycle Dealer Bond, South Dakota Snowmobile Dealer Bond
  • South Dakota Trailer Dealer Bond
  • South Dakota Boat Dealer Bond


  • Tennessee Motor Vehicle Dealer Bond


  • Texas Independant Motor Vehicle Dealer Bond, Texas Wholesale Motor Vehicle Dealer Bond, Texas Motorcycle Dealer Bond, Texas House Trailer Dealer Bond, Texas Trailer/Semi Trialer Dealer Bond, Texas Independant Mobility Motor Vehicle Dealer Bond


  • Utah Motor Vehicle Dealer Bond, Utah Special Equipment Dealer Bond
  • Utah Motorcycle Dealer Bond, Utah Off-Highway Vehicle Dealer Bond, Utah Small Trailer Dealer Bond, Utah Vehicle Crusher Bond
  • Utah Body Shop Bond


  • Vermont Motor Vehicle Dealer Bond


  • Virginia New/Used Car Dealer Bond
  • Virginia Motorcycle Dealer Bond, Virginia Motor Home and Travel Trailer Dealer Bond, Virginia Trailer Dealer Bond


  • Washington Motor Vehicle Dealer Bond
West Virginia

West Virginia:

  • West Virginia Motor Vehicle Dealer Bond


  • Wisconsin Retail Motor Vehicle Dealer Bond
  • Wisconsin Wholesale Motor Vehicle Dealer Bond
  • Wisconsin Motorcycle Dealer Bond


  • Wyoming Motor Vehicle Dealer Bond

Frequently Asked Questions About Motor Vehicle Dealer Bonds

According to data from 2016, there are 16,708 franchised dealers selling new vehicles in America and over 139,000 businesses selling used cars. In the vast majority of cases, each of these dealers has an auto dealer bond. This quick FAQ covers everything you need to know about this important type of bond.

How Long Does it Take to Obtain an Auto Dealer Bond?

Do I Need Collateral For an Auto Dealer Bond?

When and How Do I Renew My Auto Dealer Bond?

Can I Get a Lower Rate on an Auto Dealer Bond With Poor Credit?

How Are Claims Handled for Auto Dealer Bonds?

How Can I Save Money on an Auto Dealer Bond?

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