In all 50 states, motor vehicle dealers must hold a surety bond to be licensed. The state requires the bond as a guarantee of reimbursement to anyone who has experienced financial harm as the result of a dealer’s illegal and/or unethical actions.
Jet Insurance Company has helped thousands of dealers with their Motor Vehicle Dealer Bond. Get your bond with Jet in minutes online!
Bond requirements vary depending on state regulations, types of vehicles being sold, and other factors, and we understand the essentials for each surety bond needed to get and maintain your dealer license.
Jet’s direct distribution model eliminates middlemen agents and brokers to deliver the quickest service possible and best claims defense, should it be needed.
The bond premium you are quoted is based on the bond type, bond limit, your personal credit, and years of experience. The cost is only ever a small percentage of the total bond limit. The bond limit (or bond amount) is the maximum amount that can be paid out in claims within the bond’s term.
The chart shows example starting prices for a $25,000 Auto Dealer License Bond.
|Credit Tier||Monthly||1 Year|
*Prices shown are not an offer—your rate must be approved through underwriting.
With Jet, you can choose from monthly, annual, and multi-year options. We are the only surety carrier to offer a true month-to-month payment plan—pay a low cost each month and cancel at any time.
Regulatory agencies (obligees), such as the California Department of Motor Vehicles or the Florida Department of Highway Safety and Motor Vehicles, utilize surety bonds as one of the licensing requirements for motor vehicle dealers (principals).
The principal (vehicle dealer) must go through the obligee (regulator) to get licensed. The obligee relies on a third-party surety company (Jet Insurance Company) to guarantee funds through the bonds should a claim be filed on the dealer license bond due to fraudulent or negligent dealer actions.
Speaking of which, claims can be filed for many reasons. Still, generally, you should be able to rectify the situation with the customer or the obligee prior to any serious action being taken. A bond claim is a serious action that represents a failure of a dealership to uphold its duties as a licensed business. Oftentimes the surety bond claim is just a part of the dealership going out of business in a scandalous nature.
A couple of claim examples include floor plan fraud, tampering with a vehicle’s odometer, and failing to deliver a title. To learn more about claim details and processes, read our Motor Vehicle Dealer Bond Claims Guide.
Depending on the type of vehicles you deal in, the surety bond requirement will vary. The common types of surety bonds for auto dealers include (this will vary greatly depending on the state you need the bond in):
In addition to those selling vehicles, there are other auto-related businesses that may need a surety bond to operate, such as automotive recyclers, wreckers, brokers, distributors, manufacturers, etc.
In California, a $50,000 bond is required for new and used motor vehicle dealers, lessor-retailers, and wholesalers selling 25+ vehicles a year. While new and used motorcycle dealers, new and used all-terrain vehicle dealers, and wholesale dealers selling 24 or fewer vehicles a year need a $10,000 bond.
Nevada auto dealers and brokers need to hold a $100,000 surety bond for the duration of their operations. Motorcycle dealers, off-highway dealers, and trailer dealers (trailers over 3,500 lbs.) are required to file a $50,000 bond. Those selling boat trailers and trailers under 3,500 lbs. are mandated to obtain a $10,000 bond.
Those selling vehicles in Florida must file a $25,000 Motor Vehicle Dealer Bond, regardless of vehicle type. However, Jet’s rates vary depending on the type of business you’re running, e.g. used, wholesale, auction, franchise, or salvage dealer.
In most cases, an additional bond is required for other business locations.
You can get your bond in just a few minutes with Jet.
Once you’ve filled in the necessary information, you’ll be given quote options—choose the one that works best for you, provide your credit card payment, and you are done! Your bond form and receipt will be available for download immediately following successful payment.
Jet will take care of the bond filing for you, when applicable. However, some obligees require you to mail in the original signed bond with your application, especially if you are a new licensee. In this case, we will mail the bond to you. If you need the bond in a pinch, we offer a next-day shipping option for a small fee.