Illinois Auto Dealer Bond:
The Illinois Motor Vehicle Dealer bond is a License Surety Bond that serves to protect Illinois's citizens by providing a path for recourse in situations where an Auto Dealer does not adhere to the laws, rules, and regulations as set in Illinois state legal statutes. An Illinois Auto Dealer Bond may be required as part of the Motor Vehicle Dealer licensing and/or vehicle registration process. According to the National Automotive Dealers Association, there were 710 new-car dealerships in the state, generating $37.6 billion in revenue, and all these businesses had an active bond.
In Illinois, the required Motor Vehicle Dealer bond amounts are as follows:
- Illinois, Vehicle Dealer's bond requirement - $20,000 Surety Bond
You should always check with the Illinois Secretary of State Vehicle Services Department, or requesting agency, for the most current required Illinois Motor Vehicle Dealer bond amount as well as the required bond forms.
writes Illinois Motor Vehicle Dealer bonds. We can assist clients with good credit and clients with bad credit. Typically, the worse the credit, the higher the surety bond premium will be. In either case, we always work to get the best quote for you. Viking has partnered with markets that welcome Illinois Motor Vehicle Dealer bond applications and provide competitive quotes for them.
(See Also: Cost Expectations for Auto Dealer Bonds)
How to Get an Illinois Auto Dealer Bond
Meeting your Illinois motor vehicle bond requirement is relatively easy as long as you know exactly how bond agreements work upfront. Unlike insurance policies or loan contracts between you and one other party, bonds involve three parties:
- Obligee – Whatever entity requires you to have a surety bond. As the agency responsible for issuing auto dealer licenses, the Illinois Secretary of State is the obligee. You will need to submit official paperwork to this agency proving that you have a $20,000 Illinois Auto Dealer Surety Bond.
- Principal – Whoever is responsible for obtaining the bond and paying claims made against it. You and whoever else own equity in the dealership are the principal(s). The obligee will not grant you a license to sell vehicles until you obtain the bond, and if it lapses your license will too.
- Surety – Whichever company issues your surety bond. The surety acts as an intermediary between the obligee and the principal. If claims are filed against the bond, the surety guarantees payment, up to the $20,000 total, after which they collect the same amount from the principal. Without the surety company, unscrupulous dealers could simply refuse to pay the public for their own illegal actions.
Obtaining a bond is as simple as completing the application. However, first you need to find a surety company who will issue an Illinois motor vehicle dealer bond. You will need to provide them with financial information on yourself and any partners you have. Underwriters will then look into your credit history to estimate how likely you are to pay the surety company back for the claims it compensates and quote you a price for the bond premium. After paying the premium and submitting paperwork to the state, you're one step closer to getting your official auto dealer license.
How Does an Illinois Auto Dealer Bond Hold You Responsible?
The principal in a bond agreement has to pay for any claims made against the bond. For example, if a dealership sold someone a lemon, that car-buyer could file a claim with Illinois Secretary of State. If investigation proves the claim is valid, the individual is entitled to recoup the cost of the vehicle. The surety company pays out this amount immediately so that justice is not delayed. Finally, the principal pays back the surety company or else forfeits the bond. Bond agreements hold dealers responsible, which entourages lawful behavior and elevates the character of the entire auto industry. In that way, having an Illinois auto dealer surety bond is a requirement and also a benefit.
How Much Does It Cost for an Illinois Motor Vehicle Dealer Bond?
Bond premiums cost a percentage of the $20,000 total the bond is worth, often around 3-5%. The exact price is based on your credit risk. A low credit score will raise your payment, but it won't necessarily disqualify you. At Viking Bond Service, for instance, we make it a priority to get as many applicants approved for bonds as possible. You will pay the premium up front, activating the bond for 12 months. Your credit will be reevaluated upon renewal, which could raise or lower your premiums. You also need to pay for any claims filed against the bond, but only if your dealerships break the law.
Meet State Requirements for an Illinois Motor Vehicle Bond
Getting an Illinois motor vehicle surety bond may be an obligation, but it doesn't have to be a burden. Viking Bond Service has an expert team, an easy application process, and all the resources you need to meet Illinois state requirements. When you're ready to get a bond, earn your motor vehicle dealer license, and get your business up and running, reach out to us first.
Request a Motor Vehicle Dealer Bond Quote:
You have a number of ways to proceed. Call us at 1-888-278-7389 to speak with one of our Illinois bond experts. When you're ready to get the wheels in motion, you can fill out an Online Application anytime, day or night. You can also submit a specific inquiry by completing the contact form on the page. One of our agents will get back to you shortly.
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