Virginia Motor Vehicle Dealer Surety Bond

A Virginia motor vehicle dealer surety bond is a required license bond for any person or business engaged in the buying, selling, or dealing of motor vehicles within the Commonwealth of Virginia. Whether you operate as a franchise dealer selling new vehicles or an independent dealer selling used vehicles, the Virginia Motor Vehicle Dealer Board (MVDB) requires you to post a $50,000 surety bond as part of the dealer licensing process. Surety One, Inc. offers quick, no-hassle underwriting for Virginia motor vehicle dealer bonds, including options for new applicants and those with challenged credit.

Bond Amount & Requirements

Code of Virginia §46.2-1527.1(D) requires a $50,000 motor vehicle dealer surety bond for all dealer license applicants. The bond must be issued by a corporate surety licensed to do business in the Commonwealth and approved by the Attorney General. The executed bond form (MVDB 2) must be filed directly with the Motor Vehicle Dealer Board.

The bond guarantees that the dealer will not practice fraud, make fraudulent representations, or violate any provision of Chapter 15 of Title 46.2 of the Code of Virginia in the conduct of business. If a dealer violates these obligations, the bond may be used to compensate consumers, financing agencies, and the Commonwealth for financial damages. The bond must remain in effect for the first three consecutive years from the date of initial licensure.

Bond Amount	Dealer Type	Description
$50,000	Franchise Dealer	Sells new and used motor vehicles under a manufacturer or distributor agreement
$50,000	Independent Dealer	Sells used motor vehicles only; no manufacturer franchise required
$50,000	Motorcycle Dealer	Franchise or independent dealer specializing in motorcycle sales
$50,000	Trailer / RV Dealer	Sells trailers, semitrailers, or recreational vehicles

Motor Vehicle Transaction Recovery Fund

In addition to the $50,000 surety bond, new Virginia dealers are required to contribute $350 annually to the Motor Vehicle Transaction Recovery Fund during their first three years of licensure. This fund provides an additional layer of consumer protection. Like the bond itself, the fund contribution requirement is waived after three consecutive claim-free years.

As an alternative, dealers who have completed three consecutive claim-free years may elect to obtain and continuously maintain a $100,000 bond in lieu of participation in the Transaction Recovery Fund, per Code of Virginia §46.2-1527.9. Under this option, the maximum liability per single claimant is limited to $20,000, with an aggregate cap of $100,000.

Who Needs This Bond?

Code of Virginia §46.2-1508 requires that any person who engages in the business of buying, selling, or dealing in motor vehicles must be licensed by the MVDB. Specifically, a dealer license is required if you sell, offer to sell, display, or permit the display for sale of five or more motor vehicles within any 12 consecutive months.

The bond is required for:

• Franchise dealers (new and used vehicles under manufacturer agreement)
• Independent dealers (used vehicles only)
• Motorcycle dealers
• Recreational vehicle (RV) dealers
• Trailer and semitrailer dealers
• Dealers operating supplemental locations

How Much Does the Bond Cost?

The cost of a Virginia motor vehicle dealer surety bond (the “premium”) is a small percentage of the full $50,000 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.

Virginia Dealer License Requirements

In addition to the $50,000 surety bond, the Virginia Motor Vehicle Dealer Board requires the following for a dealer license:

• Completed Motor Vehicle Dealer License Application (Form MVDB 10)
• Pre-licensing Dealer-Operator Training Course (two-day course; independent dealers only)
• Passing the Dealer-Operator and Salesperson’s Qualification Test at any DMV Customer Service Center ($50 fee)
• An established place of business (not a residence) with at least 250 square feet of permanently enclosed office space dedicated exclusively to the dealership
• Contiguous parking space to display a minimum of 10 vehicles
• Dealership sign with no less than 6-inch lettering visible from the front of the business
• Open a minimum of 20 hours per week, at least 10 of which must be between 9:00 a.m. and 5:00 p.m. Monday through Friday
• Zoning Compliance Certification (Form MVDB 19) signed by local zoning official within 30 days of submission
• Comprehensive garage liability insurance for each dealer plate issued
• Criminal History Check Data Form for all owners, partners, and salesperson applicants
• Salesperson license applications (Form MVDB 57/61) for each person who will sell vehicles
• Copy of compliant Buyer’s Order (see MVDB 44 checklist)
• LLC or corporation registration with the Virginia State Corporation Commission (SCC), if applicable
• Franchise agreement from manufacturer (franchise dealers only)
• $350 Motor Vehicle Transaction Recovery Fund contribution (first three years)
• Application fee of $225 plus applicable license and salesperson fees

Filing, Renewal & Cancellation

The original executed surety bond (Form MVDB 2) must be mailed to the MVDB. The name on the bond must match the MVDB 10 application and any SCC filing documents exactly. After all paperwork is submitted and reviewed, an MVDB Field Representative will contact you to schedule an opening inspection of your business location. If the location meets all requirements, the Field Representative will issue your license, dealer plates, and certificates on site.

Virginia dealer licenses are valid for one or two years, as selected by the applicant, and expire on the last day of the month of expiration. The MVDB will mail renewal forms approximately 30 days before the expiration date. Late renewal applications (within 30 days of expiration) are subject to a penalty of 50% of licensing fees. Applications received more than 30 days after expiration will be treated as new applications.

The surety bond may be cancelled by the surety upon 30 days’ written notice to the Board. The surety must notify the Board when a claim is made, when a claim is paid, and when a bond is cancelled, including the effective date and reason for cancellation.

Bond Claims

A claim against the Virginia motor vehicle dealer surety bond may be filed by any person who is awarded a final judgment in a court of competent jurisdiction in the Commonwealth against the dealer for loss or damage resulting from fraud, fraudulent misrepresentation, violation of Chapter 15 of Title 46.2, or breach of an extended service contract. The surety company will investigate each claim and compensate valid claims up to the full $50,000 bond amount. The bonded dealer is then required to reimburse the surety for any amounts paid.

Virginia Motor Vehicle Dealer Board (MVDB)
2201 West Broad Street, Suite 104
Richmond, VA 23220
Phone: (804) 367-1100
Email: dboardlicensing@mvdb.virginia.gov
Web: mvdb.virginia.gov

Surety One, Inc. is the Virginia surety bond expert provider, licensed in all fifty states, U.S. territories, and Canada. We offer competitive rates and excellent customer service for Virginia motor vehicle dealer bonds and all other license bond classes. Need help meeting your MVDB 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.

What We Need From You

Obligee's Bond Form