Minnesota Motor Vehicle Dealer Surety Bond
A Minnesota motor vehicle dealer surety bond is a required license bond for any person or business engaged in the sale, leasing, or brokering of motor vehicles within the State of Minnesota. The Minnesota Department of Public Safety (DPS), Driver and Vehicle Services (DVS), Dealer Unit requires all dealer license applicants to post a surety bond as part of the licensing process. The standard bond amount is $50,000 for most dealer types, with a $5,000 bond required for boat, snowmobile, small horse trailer, motorized bicycle, and moped dealers (DSB license). Surety One, Inc. offers quick, no-hassle underwriting for Minnesota motor vehicle dealer bonds, including options for new applicants and those with challenged credit.
Bond Amount & Requirements
Minnesota Statutes Section 168.27 requires all motor vehicle dealer license applicants to file a surety bond with DVS. The bond must be filed using DVS Form PS2446-10 (Motor Vehicle Dealer License Surety Bond). The bond obligates the licensed dealer to conduct business according to Minnesota statutes and to pay all required taxes, license fees, and penalties.
The bond provides financial protection to the state as well as any seller, purchaser, or transferor of a vehicle in the event the dealership cannot fulfill its professional obligations as required by law.
| Bond Amount | License Type | Description |
|---|---|---|
| $50,000 | New Motor Vehicle Dealer | Sells new and used motor vehicles under a franchise agreement |
| $50,000 | Used Motor Vehicle Dealer | Sells used motor vehicles to the general public |
| $50,000 | Motor Vehicle Broker | Arranges or facilitates the sale of motor vehicles between parties |
| $50,000 | Wholesale Dealer | Sells motor vehicles exclusively to other licensed dealers |
| $50,000 | Auction Dealer | Sells used motor vehicles at auction |
| $50,000 | Lessor (New or Used) | Leases new or used motor vehicles (120+ day leases) |
| $50,000 | Scrap Metal Processor | Processes scrap vehicles for metal recovery |
| $50,000 | Used Vehicle Parts Dealer | Sells used vehicle parts |
| $50,000 | Salvage Pool | Operates a salvage vehicle pool for insurance companies and others |
| $50,000 | Limited-Use Vehicle Dealer | Sells ATVs, off-highway motorcycles, and similar limited-use vehicles |
| $5,000 | DSB Dealer | Sells motorized bicycles/mopeds, boat trailers, snowmobile trailers, and small horse trailers |
Important — Separate City Licenses: Dealers who operate in a city outside the seven-county Twin Cities metro area and in a city with fewer than 100,000 residents must acquire a separate license from that city in addition to the state DVS license. This dual-licensing requirement is unique to Minnesota.
Who Needs This Bond?
Minnesota Statutes Section 168.27 requires licensure for anyone selling or leasing five (5) or more motor vehicles within a 12-month period. The statute broadly defines a motor vehicle dealer to include new motor vehicle dealers, used motor vehicle dealers, motor vehicle brokers, wholesalers, auctioneers, lessors of new or used motor vehicles, scrap metal processors, used vehicle parts dealers, salvage pools, and limited-use vehicle dealers.
The bond is required for:
- New (franchise) motor vehicle dealers
- Used motor vehicle dealers
- Motor vehicle brokers
- Wholesale dealers
- Auction dealers
- Lessors of new or used motor vehicles (leases of 120+ days)
- Scrap metal processors
- Used vehicle parts dealers
- Salvage pool operators
- Limited-use vehicle dealers (ATVs, off-highway motorcycles)
- DSB dealers (motorized bicycles, boat/snowmobile/small horse trailers)
How Much Does the Bond Cost?
The cost of a Minnesota motor vehicle dealer surety bond (the “premium”) is a small percentage of the required 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.
Minnesota Dealer License Requirements
In addition to the surety bond, the Minnesota DVS Dealer Unit requires the following for a dealer license:
- Completed Motor Vehicle Dealer License Application with photocopy of driver’s license
- Dealer Surety Bond (Form PS2446-10)
- Commercial Location Checklist (Form PS2410)
- Zoning Verification (Form PS2421) from local zoning official
- A permanent, enclosed building on a permanent foundation, connected to local sewer and water facilities, with its own address and separate from any other business
- Business must be open a minimum of 4 consecutive hours at least once per week
- Verification of Property Lease (Form PS2407) or proof of building ownership
- Certification of Compliance with Minnesota Worker’s Compensation Law (Form PS2420)
- Liability insurance on all vehicles held for sale/resale: $30,000 per person / $60,000 per accident / $10,000 property damage / $25,000/$50,000 uninsured motorist / $20,000 medical and $20,000 non-medical PIP
- Demonstration/In-Transit Plate Application (Form PS2405)
- Franchise Agreement (Form PS2404) — new vehicle dealers only
- License fee of $250 (all dealers) or $10 (DSB dealers)
- Criminal background disclosure (felony convictions for fraud, embezzlement, theft, forgery, tax evasion, etc.)
Filing, Renewal & Cancellation
The original surety bond and all application documents must be submitted to the DVS Dealer Unit. Processing typically takes 3 to 5 days. Minnesota dealer licenses are valid for one year starting with the month the license is issued. The bond may run continuously or have a fixed expiration date. For both continuous and fixed-term bonds, the premium is payable annually.
The surety company may cancel the bond with 30 days’ written notice. If the bond is canceled, it must be replaced before the cancellation date to avoid license suspension. Renewal/Continuation Certificates are required to maintain the bond in effect.
Bond Claims
A claim against the Minnesota motor vehicle dealer surety bond may be filed by the state, or by any seller, purchaser, or transferor of a vehicle who suffers financial harm due to the dealer’s failure to comply with Minnesota Statutes Section 168.27. Common claim triggers include odometer tampering, failure to pay state or federal taxes, receiving or selling stolen vehicles, fraud in vehicle sales, and failure to transfer titles. The surety company will investigate each claim and compensate valid claims up to the full bond amount. The bonded dealer is then required to reimburse the surety for any amounts paid.
Minnesota Department of Public Safety
Driver and Vehicle Services (DVS), Dealer Unit
445 Minnesota Street, Suite 186
St. Paul, MN 55101-5186
Phone: (651) 201-7800
Email: DVS.Dealerquestion@state.mn.us
Web: dps.mn.gov/divisions/dvs/business/dealers
Surety One, Inc. is the Minnesota surety bond expert provider, licensed in all fifty states, U.S. territories, and Canada. We offer competitive rates and excellent customer service for Minnesota motor vehicle dealer bonds and all other license bond classes. Need help meeting your DVS 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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