An auto dealer must file a Maine motor vehicle dealer bond with the Secretary of State unless he or she deals exclusively with equipment and light trailers. State statute defines a motor vehicle dealer as a person engaged in the business of buying, selling, exchanging or offering to negotiate, negotiating or advertising the sale of a vehicle or industrial equipment and who has: A.) An established place of business for those purposes in this State; and B.) A current dealer license issued by the Secretary of State (29A §851). The Maine motor vehicle dealer bond must be written by a surety company admitted to do business in the State and written in an amount based on the number of vehicles sold during a calendar year. The formula is as follows:
A.) For 0 to 50 sales, $5,000 surety bond
B.) For 51 to 100 sales, $10,000 surety bond
C.) For 101 to 150 sales, $15,000 surety bond
D.) For 151 to 200 sales, $20,000 surety bond
E.) For 201 sales and over, $25,000 surety bond
Initial licensees must post a
Maine motor vehicle dealer bond based on projected sales, and then are subject to review after initial bonding depending on volume. ALL licensees are reviewed annually by the
Secretary of State to determine compliance with the correct amount of the bonds. Failure to maintain appropriate bonding results in immediate suspension of the dealer’s license. Pursuant to
29A §901, a claim against the surety bond required by law must file the claim within three years from the date of sale.
The
Maine motor vehicle dealer bond is a compliance instrument that guarantees that the dealer will faithfully observe the provisions of Title 29A M.R. S. A., and all the rules promulgated thereunder relating to the business of a motor vehicle dealer, and an indemnity guarantee for any person, firm or operation who may suffer loss because of the dealer’s failure to comply. The obligation may be written on either a terminating (with license) or continuing basis. Either way, the bond is cumulative in nature, a full penalty being available to the Obligee for each year that the
motor vehicle dealer bond is in effect. The surety can cancel the bond at any time by giving thirty (30) days written notice by registered or certified mail to the Secretary of State, State of Maine, Motor Vehicle Division.
Maine surety bond leader,
Surety One, Inc. offers
motor vehicle dealer bonds in all states where they are required. Our special programs allow us to offer surety support regardless of applicant credit condition. Do you need to know the bond requirements for dealers in any state? Click
here for our MVD bond guide. We also offer certificate of
title bonds and
lien release bonds which are often needed in the course of dealership operations. Visit us at SuretyOne.com call
(800) 373-2804, or email us at
Underwriting@SuretyOne.com for a
Maine motor vehicle dealer bond application or for information on any
Maine surety need.
