South Dakota Motor Vehicle Dealer Surety Bond
A South Dakota motor vehicle dealer surety bond is a required license bond for any person or business engaged in the sale of motor vehicles, trailers, boats, motorcycles, snowmobiles, or mobile/manufactured homes within the State of South Dakota. The South Dakota Department of Revenue (DOR), Division of Motor Vehicles requires all dealer license applicants to post a surety bond. Bond amounts range from $5,000 to $25,000 depending on vehicle type. South Dakota uniquely offers a 5-year dealer license with annual renewals processed through your local county treasurer’s office. Surety One, Inc. offers quick, no-hassle underwriting for all South Dakota motor vehicle dealer bonds.
Bond Amount & Requirements
South Dakota Codified Laws SDCL 32-6B-7 requires all dealer license applicants to file a surety bond with the Department of Revenue. The bond must be issued by a bonding company qualified to do business in South Dakota.
| Bond Amount | License Type | Description |
|---|---|---|
| $25,000 | New Motor Vehicle Dealer | Franchise dealer selling new and used vehicles |
| $25,000 | Used Motor Vehicle Dealer | Sells used motor vehicles to the public |
| $25,000 | Mobile / Manufactured Home Dealer | Sells mobile and manufactured homes |
| $25,000 | Final Stage Manufacturer | Completes manufacturing of incomplete vehicles |
| $20,000 | Boat Dealer | Sells new and/or used boats |
| $10,000 | Trailer Dealer | Sells new and/or used trailers |
| $10,000 | Emergency Vehicle Dealer | Sells emergency vehicles |
| $5,000 | Motorcycle Dealer | Sells motorcycles and off-road vehicles |
| $5,000 | Snowmobile Dealer | Sells snowmobiles |
Important — 5-Year License & County Treasurer Renewal: South Dakota is one of the few states that issues dealer licenses valid for 5 years (with staggered expiration dates assigned at issuance). However, dealers must still submit an annual renewal application and fee. Renewal notices are mailed 3 months before expiration, and renewals are processed through the dealer’s local county treasurer’s office — not the state DOR directly. Dealers who have already filed a bond with the department need not file a new bond at renewal unless the dealership name changes or a new bond is obtained. The 4% motor vehicle excise tax is exempt for dealer-owned inventory.
Who Needs This Bond?
South Dakota requires a dealer license for anyone who sells 5 or more vehicles within a 12-month period or 3 or more trailers. Licensing also covers auctions, conversions, manufacturing, and leasing. Operating without a license is a Class 2 misdemeanor (Class 1 for repeat violations). The bond applies to:
- New and used motor vehicle dealers — $25,000
- Mobile / manufactured home dealers — $25,000
- Final stage manufacturers — $25,000
- Boat dealers — $20,000
- Trailer dealers — $10,000
- Emergency vehicle dealers — $10,000
- Motorcycle dealers — $5,000
- Snowmobile dealers — $5,000
How Much Does the Bond Cost?
The cost is a small percentage of the required 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.
South Dakota Dealer License Requirements
- Completed Dealer Application filed with the DOR Motor Vehicle Division
- Surety bond for the appropriate license type
- Enclosed permanent structure located in South Dakota, adequately heated and lighted
- Zoning approval letter from city or county
- Open to the public at least 20 hours per week between 8:00 AM and 8:00 PM
- Phone number and hours of operation posted at or near the main entrance
- Exterior sign permanently affixed, containing the business name, clearly legible from the public right-of-way
- Improved display area large enough for 5 or more vehicles/boats of the type licensed to sell
- Public liability insurance of at least $300,000 (vehicle, used vehicle, and motorcycle dealers only; not required for trailer, snowmobile, mobile home, or boat dealers)
- Copy of lease or deed for business location
- Franchise agreement (new vehicle dealers)
- DOR representative on-site inspection and certification before license issuance
- Business location cannot be a hotel, motel, or apartment
Filing, Renewal & Cancellation
The bond is continuous in form with no fixed expiration date, remaining in force until canceled. Premium is payable annually. The surety may cancel by giving written notice to the Department of Revenue and the dealer; cancellation becomes effective 30 days after mailing. Dealer licenses are valid for 5 years with staggered expiration dates, but annual renewal applications and fees are required. Renewals are processed through your local county treasurer’s office.
Bond Claims
Claims may be filed by any person who suffers loss or damage from fraud or other unlawful business practices by the dealer, including failure to deliver title, misrepresentation, and failure to remit required taxes and fees.
South Dakota Department of Revenue
Division of Motor Vehicles
445 E. Capitol Avenue
Pierre, SD 57501
Phone: (800) 829-9188 / (605) 773-4416
Email: motorvehicle@state.sd.us
Web: dor.sd.gov
Surety One, Inc. is the South Dakota surety bond expert provider, licensed in all fifty states, U.S. territories, and Canada. We offer competitive rates for all South Dakota dealer bonds — from $5,000 motorcycle bonds to $25,000 auto 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
