Effective March 28th, 2017, enhanced New York auto dealer surety bond requirements will take effect. The New York Vehicle and Traffic Law has been modified to increase the surety bond sales-to-bond thresholds. Retail or wholesale motor vehicle dealers that sold fifty or fewer vehicles in the previous calendar year must provide a $20,000 surety bond. Retail or wholesale motor vehicle dealers that sold more than fifty vehicles in the previous calendar year must provide a $100,000 surety bond. The surety bond has not changed significantly, however due to the large bond penalty in the case of dealers over the fifty vehicle sales level, new underwriting requirements will apply. Auto dealers that are in the business of only converting motor vehicles in to tow trucks, buses, school buses, garbage trucks, RVs and trailers are exempt from posting the surety bond.
A New York auto dealer surety bond guarantees the performance of specific duties. The auto dealer must pay all valid bank drafts drawn for the purchase of motor vehicles, transfer of good title to each motor vehicle sold, hold in trust all customer deposits related to the sale of a motor vehicle between the time of receipt of such customer deposit and the transfer of good title to the vehicle to the customer, pay any/all fines imposed on the motor vehicle dealer by the Commissioner pursuant to the provisions of licensing statute.
The Commissioner of the Department of Motor Vehicles provides helpful instructions about the surety bond on the state website, as follows:
“DMV does not provide Surety Bonds; you must contact a surety insurance company and have them fill out the Dealer Bond Under NYS Vehicle and Traffic Law Section 415 (6-B) (VS-3). Be sure that the business name and mailing address on your bond exactly matches those that show on your application. The amount of the bond depends on the number of vehicles you anticipate selling (used motor vehicle dealers):
Vehicles Sold in Previous Calendar Year and Corresponding New York Auto Dealer Surety Bond Amounts
- 50 or fewer $20,000
- More than 50 $100,000
- Franchised dealers selling cars, SUVs, light trucks, etc.
* Dealers selling only trailers, motorcycles, vehicles over 10,000 pounds, ATVs, boats, snowmobiles are exempt from the bond requirements. $50,000
The auto dealer must submit a hard copy of his or her application, complete original sealed and signed surety bond with power of attorney made out to the dealer’s business name and address, associated registration documents and fee to:
NYS DMV Bureau of Consumer & Facility Services
P.O. Box 2700
Albany, NY 12220-0700
New York surety bond leader, Surety One, Inc. offers same-day servicing of your new or renewal dealer bond request. Our special programs allow us to offer you bonding regardless of your credit and financial condition. Damaged credit? No problem! We have non-standard bonding programs for you. Do you operate in multiple states? No problem! We offer motor vehicle dealer bonds in all states where they are required by law. We also offer certificate of title bonds occasionally needed in the course of your dealership operations. Visit us at SuretyOne.com, call (800) 373-2804, or email us at Underwriting@SuretyOne.com for a New York auto dealer surety bond application or for information on any surety need.
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