Rhode Island Motor Vehicle Dealer Surety Bond
A Rhode Island motor vehicle dealer surety bond is a required license bond for any person or business engaged in the sale of motor vehicles within the State of Rhode Island. The Rhode Island Department of Revenue, Division of Motor Vehicles, through its Dealers’ License and Regulation Office, requires all dealer license applicants to post a $50,000 surety bond. Rhode Island has an unusually rigorous licensing process that includes a Dealer’s Hearing Board, a mandatory CPA-prepared financial statement, and a required $50,000 approved line of credit. Surety One, Inc. offers quick, no-hassle underwriting for Rhode Island motor vehicle dealer bonds.
Bond Amount & Requirements
Rhode Island General Laws Title 31, Chapter 5 requires all motor vehicle dealer license applicants to file a $50,000 surety bond. The bond is bound to the Rhode Island Dealers’ License and Regulations Office and covers all costs and damages caused by any violation of Chapter 5 or any regulation of the Office.
| Bond Amount | License Type | Description |
|---|---|---|
| $50,000 | New (Franchise) Motor Vehicle Dealer | Sells new and used vehicles under manufacturer franchise |
| $50,000 | Used Motor Vehicle Dealer | Sells used motor vehicles to the public |
| $50,000 | Wholesale Dealer | Sells motor vehicles to other licensed dealers |
| $50,000 | Public Consignment Auction Dealer | Conducts motor vehicle auction sales |
Important — Hearing Board, CPA Financial Statement & $50K Credit Line: Rhode Island has one of the most rigorous dealer licensing processes in the country. After application, the dealer is investigated and scheduled for a hearing before the Dealer’s Hearing Board. Applicants must also submit a financial statement prepared by a certified public accountant (CPA), accompanied by an approved line of credit for $50,000 from a financial institution in the dealer’s name. The surety may terminate with 60 days’ written notice. No action to recover on the bond may be brought after 2 years from bond termination.
Who Needs This Bond?
Rhode Island requires a dealer license for anyone who sells four (4) or more motor vehicles in a year. Used vehicle dealers in certain cities must also obtain a “Second Hand License” from their municipality. The bond applies to:
- New (franchise) motor vehicle dealers — $50,000
- Used motor vehicle dealers — $50,000
- Wholesale dealers — $50,000
- Public consignment auction dealers — $50,000
Note: Used car dealership names must include the phrase “Auto Sales” in the business name.
How Much Does the Bond Cost?
The cost is a small percentage of the $50,000 bond amount, determined by credit, financials, and experience. Surety One, Inc. offers competitive rates for all credit profiles. Quoting is free of charge with no obligation to purchase.
Rhode Island Dealer License Requirements
- Dealership name and location pre-approved by the Dealers’ License and Regulation Office
- Completed and notarized application with all supporting documentation
- $50,000 surety bond — completed, signed, and notarized in the DBA name, with Power of Attorney attached
- Financial statement prepared by a certified public accountant (CPA), signed and notarized
- Approved line of credit for $50,000 from a financial institution in the dealer’s name
- Bureau of Criminal Identification (BCI) background check for each owner, partner, or corporate officer (issued by the Attorney General’s Office; out-of-state residents or recent relocations require checks from prior states)
- Copy of formal lease (1-year minimum, notarized, stating total area) or deed
- Permanent business location: minimum 2,400 sq ft building and 2,400 sq ft outside lot
- Business sign or window lettering of at least 24 square feet with the business name as listed on license
- Local zoning approval for motor vehicle sales at the proposed location
- Four photographs of the outside of the building from all angles
- Dealer plate insurance (GU-1338 certificate filed with Financial Responsibility Office)
- Franchise agreement (new vehicle dealers); 30-day protest period must pass before application
- Fax blank Bill of Sale to the Office for approval
- License fee: $303.50 per location (main and annex)
- Second Hand License from the municipality (required for used dealers in designated cities)
Filing, Renewal & Cancellation
The bond expires December 31st of each year. A renewal application must be submitted annually by December 31st. The underlying dealer license is valid for three years from the date of issuance, but the annual bond and renewal application are required every year. The surety may terminate by giving 60 days’ written notice to the principal and the Dealers’ License and Regulations Office. Liability ceases 60 days after notice, except for violations occurring before that date.
Bond Claims
The bond covers all costs and damages caused by any violation of Chapter 5 or any regulation of the Rhode Island Dealers’ License and Regulations Office. No action to recover on the bond may be brought after 2 years from the termination of the bond — this explicit statute of limitations is codified directly in the bond form.
Rhode Island Division of Motor Vehicles
Dealers’ License and Regulation Office
600 New London Avenue
Cranston, RI 02920-3024
Phone: (401) 462-5746
Fax: (401) 462-5789
Web: dmv.ri.gov
Surety One, Inc. is the Rhode Island surety bond expert provider, licensed in all fifty states, U.S. territories, and Canada. We offer competitive rates for Rhode Island motor vehicle dealer bonds and all other license bond classes. Call us at (800) 373-2804, email Underwriting@SuretyOne.com, or chat with a live underwriter for immediate assistance.
Surety bond application review and quoting are free of charge. There is no obligation to purchase.
What We Need From You
Obligee's Bond Form
