Iowa Auto Dealer Bond

Iowa Auto Dealer Bond

In Iowa, motor vehicle dealers and towable recreational vehicle dealers need to have a $75,000 surety bond to be licensed. The Iowa Department of Transportation requires the bond as a form of protection for the state and its citizens in cases of wrongful dealer actions that lead to monetary loss.

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At Jet, you’re getting the cream of the crop. We cut out middlemen agents and brokers to deliver pricing that works for everyone—no hidden fees involved. You’re also getting direct access to the surety company that provides claims defense, should it be needed.

How Much Does an Iowa Auto Dealer Bond Cost?

Iowa Motor Vehicle Dealer Bonds start at $150 for one year or $15 per month. If you need the Towable Recreational Vehicle Dealer Bond, the starting rates are $563 annually or $56 monthly. Multi-year rates are also available.

Bond TypeMonthlyAnnual
Motor Vehicle Dealer$28$281
Towable Recreational Vehicle Dealer$56$563
Iowa Auto Dealer Bond Pricing

As is standard in the surety industry, a soft credit check is required to be approved for a quote. This helps determine the risk associated. The longer you’re in business, the more trustworthy your business is; therefore, if you have great credit and several years of experience, you’ll qualify for the lowest rates.

Getting a Motor Vehicle Dealer’s License With Iowa DOT

For Iowa dealerships to be considered a Place of Business, the following criteria must be met:

  1. An office
  2. A repair facility
  3. A display facility
  4. Zoning compliance
  5. Corporation compliance
  6. Franchise (if selling new vehicles)
  7. On-site inspection
  8. Financial responsibility (liability insurance)
  9. Dealer license training (for used vehicle dealers)
  10. $75,000 surety bond

Additional details can be found on the Motor Vehicle Dealer’s License page.

Getting a Towable Recreational Vehicle Dealer’s License With Iowa DOT

Even if you’re licensed as a motor vehicle dealer, a towable recreational vehicle dealer's license is still required. Iowa towable RV dealers must meet the following Place of Business requirements:

  1. Contract for new towable recreational vehicles
  2. Extension lot
  3. Phone service and office area
  4. A display facility
  5. A repair facility 
  6. $75,000 surety bond

Towable RVs include toy haulers, travel trailers, fifth-wheels, folding camping trailers, truck campers, and park model RVs.
For more information, view the Towable Recreational Vehicle Dealer’s License page.

What Is the Purpose of Motor Vehicle Dealer Bonds?

Iowa, along with the other 49 states, uses dealer license bonds as a tool to protect its people. Before getting a license, and to maintain one, a surety bond is required for all motor vehicle dealers in the state. The bond provides a guarantee that should the dealer act in a manner that causes monetary loss, there is restitution available. 

Jet’s position in the mix, as the surety company, is the guarantor of funds in the case of a bond claim. Jet will pay out valid claims, but will seek reimbursement from the dealer. This is because surety bonds are unlike traditional liability insurance and only pay out in cases of negligent or fraudulent acts that have led to finanical damage. The dealer is responsible for their actions and therefore must restore the bond to its full limit by paying Jet back.

Laws surrounding vehicle dealers can be found in the following links:

Iowa Code, Chapter 321 - Motor Vehicles and Law of the Road
Iowa Code, Chapter 322 - Vehicle Manufacturers, Distributors, Wholesalers, & Dealers
Iowa Code, Chapter 322C - Recreational Vehicle Dealers, Manufacturers, & Distributors

Getting Your Surety Bond With Jet

The first step is filling out the application, which only asks for the information absolutely necessary to get you a bond, e.g. your name, phone number, business name and address, and your social security number for the soft credit check.

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After this, you’ll be presented with monthly, annual, and multi-year rates. Choose the one that works best for you and then fulfill payment. Then, your bond form and receipt are available to download for your records.

Vehicle Central Programs
Iowa Department of Transportation
P.O. Box 9278
Des Moines, IA 50306

Read More About Dealer Bond Claims and Bond Handling With Jet

How to Renew My Bond

Need to renew your bond? Read more on Jet’s process to renew your bond.

How to Cancel My Bond

See the details surrounding canceling your bond.

Bond Claim Process

Motor Vehicle Dealers need to be aware of what causes a claim and what happens after a claim is made.

Example Form of the Iowa Bond for Motor Vehicle Dealer and/or Towable Recreational Vehicle Dealer

Iowa Auto Dealer Bond Form

Notary Bond Application:

X

Business Information:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Employee Dishonesty Bond Application:

Business Information:

Business Description:

Coverage Requirements:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Contract Bond Application:

X

Business Information:

Owner Information:

Job Details:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Worker's Compensation Application:

X

Business Information:

Business Description:

Coverage Requirements

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information: