Pursuant to state law a West Virginia motor vehicle dealer bond is required of ALL dealerships, whether engaged in the sale of new or used autos. Pursuant to §17A-6-1,”new motor vehicle dealer” means every person other than agents and employees while acting within the scope of their, engaged in, or held out to the public to be engaged in, the business of selling five or more new motor vehicles OR new and used motor vehicles within any fiscal year. The West Virginia motor vehicle dealer bond is also required of dealers in exclusively USED autos. “Used motor vehicle dealer” means every person other than agents and employees acting within the scope of their employment engaged in, or held out to the public to be engaged in the business of selling five or more used motor vehicles in any fiscal year. As part of the lengthy application process, a dealer applicant must provide a West Virginia motor vehicle dealer bond written in the amount of twenty-five thousand dollars ($25,000), in the form acceptable to the Commissioner of Motor Vehicles, conditioned that the applicant will not in the conduct of his or her dealership business commit any fraud or make any fraudulent representation which causes a financial loss to any purchaser, seller, financial institution or agency, or the State of West Virginia. The surety bond must be executed by a corporate surety authorized to do business in the state. The West Virginia motor vehicle dealer bond does not have a cancellation provision manuscripted into the obligation. Also underwriters should pay close attention to the wording of both the law AND the state’s surety bond form. The statute (§17A-6-4(f)) states, the “bond shall be effective as of the date on which the license certificate sought is issued”, and the bond form, “This bond covers acts and omissions by the Principal that occur during the license year July 1, ______________, to June 30, _________, as of the effective date the Principal is issued or renewed license by the West Virginia DMV”. From the tenor of the statute and wording of the face sheet there is a danger of cumulative liability on the West Virginia motor vehicle dealer bond. Further investigation with the Commissioner and dealer understanding of this provision are prudent.
West Virginia surety leader, Surety One, Inc. offers motor vehicle dealer bonds in all states where they are required by law. Our special programs allow us to offer you surety support regardless of your credit and financial condition. We also offer certificate of title bonds and lien release bonds which are sometimes needed in the course of your dealership operations. Visit us at SuretyOne.com, call (787) 333-0222 or (800) 373-2804, or email us at Underwriting@SuretyOne.com for a West Virginia motor vehicle dealer bond application or for information on any surety bond need.
