Motor Vehicle Dealer Bond

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Bond Penalty: Bond amount set by state law.

A motor vehicle dealer bond is required by every state that requires licensing of auto dealers. An auto dealer bond is simple license and permit ("L&P") obligation. Dealers are held to specific standards of conduct and fair-dealing with the public as well as adherence to certain fiduciary duties. This surety bond generally guarantees that the dealer will:

  • Abide by the law and administrative codes that regulate the business.
  • Maintain adequate records of sales, titles and inventory.
  • Receive and hold in trust those funds belonging to third parties such as auto finance companies and disburse them correctly.
  • Deliver clean titles and clear paperwork detailing motor vehicles sales and their guarantees.
  • Maintain in full force and effect dealer/garagekeeper insurance in those states which require the same.

A motor vehicle dealer bond can also guarantee that the dealer or broker will comply with state tax regimes. A California motor vehicle dealer bond for example, guarantees that all licensees selling vehicles or vessels, retail or wholesale will file an application for a Seller's Permit issued by the Board of Equalization. Explore each state's requirements:

National surety bond company, Surety One, Inc. is available for same-day support of your new or renewal auto dealer bond request. Our special programs allow us to offer you bonding regardless of credit condition. Do you operate in multiple states? No problem! We offer motor vehicle dealer bonds in ALL of them. (Click here for our MVD bond guide.) We also offer certificate of title bonds and lien release bonds needed in the course of your dealership operations.

Surety bond application review and quoting are free of charge. There is no obligation to purchase.