Dealer Bonds Are Requirements of State Licenses for Dealerships

Tuesday, February 5th, 2019 - Uncategorized

If you plan on opening a car dealership, then there are many logistical hurdles and challenges you’re facing. One of those is getting your dealer license in whichever state you’re working in. Along with that will come the specifics you need to accomplish to obtain that license, and to keep it in good standing, and at the top of the list is your motor vehicle dealer bond. Here, you’ll learn more about dealership bonds, how they differ from state to state, and more.

A car dealership bond is a requirement to obtain dealer licenses. It’s a crucial form of protection for your business and the property you’re selling to and handling for your customers. It also though offers a mark of authenticity for consumers, and ensures that you’re a legitimate business, with an investment into keeping things working properly.

State by state, there will be a great deal of variance in terms of the requirements of your dealer bond. Differences may include the minimum amount that the bond needs to be for, typically with a range of approximately $25 to $50,000.

Beyond that, other variances may include how long the bond is good for, typically one to two years, and when it must be renewed, either at a specific date for all dealers in the state, or at a specific date for you based on when you got it. The type of dealership you’re operating may also impact the specifics of the bond you need to get.

Of course, keep in mind that your dealer bond may not be the only requirement for your license. States may specify a number of different regulations or stipulations. Initially when you apply, you’ll have to closely follow their application steps, with specific forms to file and fees to pay. You’ll likely need to have a background check and there may be several other precautionary measures taken such as verifying your business address and phone number.

Also though, obtaining a garage liability insurance policy may also be required. This is true in a number of states, although the minimum amount for the bond may differ. In other locales, as opposed to a garage liability policy, a vehicle liability policy may be used in its place.

By working with a company who has experience operating within your state, they should be able to easily guide you through what you need to do, and when. They’ll inform you of the requirements and keep you apprised of any costs or changes. Don’t settle for anything less when the health and wellbeing of your business is at stake.

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