Indiana Motor Vehicle Dealer Surety Bond
An Indiana motor vehicle dealer surety bond — officially titled the Indiana Vehicle Merchandising Certificate/Bond — is a required license bond for any person or business engaged in the sale of motor vehicles within the State of Indiana. Whether you operate as a new vehicle franchise dealer, a used car dealer, an automotive salvage recycler, or a watercraft dealer, the Indiana Secretary of State, Auto Dealer Services Division requires you to post a $25,000 surety bond as part of the dealer licensing process. Surety One, Inc. offers quick, no-hassle underwriting for Indiana motor vehicle dealer bonds, including options for new applicants and those with challenged credit.
Bond Amount & Requirements
Indiana Code 9-32-11-2 requires a $25,000 vehicle merchandising bond for all dealer license applicants. The bond must be filed using State Form 53966 (R7/03-24) and is made in favor of the Indiana Secretary of State. It secures payment of fines, penalties, costs, and fees assessed by the Secretary and guarantees the dealer’s compliance with Indiana Code Title 9, Article 32 governing motor vehicle dealers.
The bond protects all purchasers, sellers, financing agencies, and government agencies from monetary loss stemming from fraud, fraudulent representation, failure to comply with licensing law, and failure to pay required taxes and fees. A claim requires a judgment rendered in favor of the complainant before the surety is obligated to pay.
Important — October 2024 Update: As of October 1, 2024, the Auto Dealer Services Division requires all bond and insurance updates to be completed online through the Dealer Portal. The Division no longer accepts bond or insurance updates via U.S. mail or email.
Who Needs This Bond?
Indiana statute 9-32-2-9.6 defines a motor vehicle dealer as any person or business entity who sells, offers for sale, or advertises for sale twelve (12) or more motor vehicles (including semitrailers, trailers, off-road vehicles, snowmobiles, mini-trucks, and recreational vehicles) or six (6) or more watercraft within a 12-month period.
The following license classifications each require a separate $25,000 surety bond:
| Bond Amount | License Classification | Description |
|---|---|---|
| $25,000 | Dealer (New & Used) | Sells motor vehicles to consumers; includes franchise and independent dealers |
| $25,000 | Wholesale Dealer | Sells motor vehicles exclusively to other licensed dealers |
| $25,000 | Distributor | Sells motor vehicles to licensed dealers on behalf of manufacturers |
| $25,000 | Manufacturer / Converter | Builds, constructs, or converts motor vehicles for resale |
| $25,000 | Automobile Auctioneer | Provides a location for auctioneers to conduct vehicle auction business |
| $25,000 | Automotive Salvage Recycler | Dismantles, wrecks, or rebuilds vehicles to resell parts or rebuild |
| $25,000 | Transfer Dealer | Transfers titles and ownership of 12+ vehicles per year (not a dealer or manufacturer) |
| $25,000 | Watercraft Dealer | Sells or advertises 6+ watercraft within a 12-month period |
How Much Does the Bond Cost?
The cost of an Indiana motor vehicle dealer surety bond (the “premium”) is a small percentage of the full $25,000 bond amount. Your exact premium is determined by a number of underwriting factors including your personal credit score, business financial strength, industry experience, and claims history. Because each applicant’s profile is unique, premiums vary and are quoted on an individual basis.
Surety One, Inc. offers competitive rates for all credit profiles, including programs for applicants with challenged credit. Surety bond application review and quoting are free of charge. There is no obligation to purchase. Contact us for your personalized quote.
Indiana Dealer License Requirements
In addition to the $25,000 surety bond, the Indiana Secretary of State, Auto Dealer Services Division requires the following for a dealer license:
- Completed dealer license application submitted to the Auto Dealer Services Division
- Dealer Training Certificate — required for all used car dealers not previously licensed (available through the Indiana Independent Automobile Dealers Association; offered online)
- A permanent business location zoned for commercial use with at least 1,300 square feet
- Permanent signage identifying the dealership, visible from the roadway
- An office equipped with desk, chairs, filing space, and a working telephone
- Customer parking with asphalt, concrete, rock, or other weather-resistant surface
- Business must be staffed and open at least 20 hours per week, with the remaining 10 hours serviced by mobile, pager, or telephone answering service
- Garage liability insurance ($100,000 bodily injury per person / $300,000 per accident / $50,000 property damage)
- Retail Merchant Certificate issued by the Indiana Department of Revenue
- Franchise agreement from the manufacturer (new vehicle dealers only)
- $30 application fee plus all applicable dealer fees
Note: The business name and address on all required documents must match exactly with the name and address listed on the dealer license application.
Filing, Renewal & Cancellation
The executed surety bond (State Form 53966) must be submitted to the Auto Dealer Services Division. As of October 2024, bond updates must be completed online through the Indiana Dealer Portal. The bond must be written by a surety company authorized to do business in the State of Indiana.
Indiana dealer licenses expire annually regardless of the date of issuance. The expiration date is based on the first letter of the dealer’s business name, with expirations staggered throughout the year. Both the state and the surety will typically send renewal reminders at least 30 days before expiration. If you do not renew your bond before it expires, your dealer license will be suspended during any lapse in bond coverage.
Bond Claims
A claim against the Indiana vehicle merchandising bond may be filed by purchasers, sellers, financing agencies, or government agencies. Claims may be made for monetary loss resulting from fraud, fraudulent representation, violation of Indiana Code 9-32, or failure to pay required taxes and fees. Common claim triggers include odometer tampering, nonpayment of fees and taxes, and failure to deliver a vehicle title. The surety bond form requires a judgment rendered in favor of the complainant before the surety is obligated to pay, up to the full $25,000 bond amount.
Indiana Secretary of State
Auto Dealer Services Division
302 West Washington Street, Room E-111
Indianapolis, IN 46204
Phone: (317) 234-7190
Email: DealerServices@sos.in.gov
Web: in.gov/sos/dealer
Surety One, Inc. is the Indiana surety bond expert provider, licensed in all fifty states, U.S. territories, and Canada. We offer competitive rates and excellent customer service for Indiana motor vehicle dealer bonds and all other license bond classes. Need help meeting your Indiana Secretary of State licensing requirements? Call us at (800) 373-2804, email us at Underwriting@SuretyOne.com, or click here to chat with a live underwriter (no bots!) for immediate assistance. We’re here to support your business success.
Surety bond application review and quoting are free of charge. There is no obligation to purchase.
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