Motor Vehicle Dealer Bonds – Iowa
Auto dealers and trailer dealers are required to carry bonding in Iowa, which is enforced by the Iowa Department of Transportation, Office of Vehicle & Motor Carrier Services. Auto dealers must carry a $75,000 bond to show financial integrity. Trailer dealers must have a $25,000 bond.
Bonds are an indicator that dealers are complying with state laws. By following the legal requirement to be bonded, the dealer shows financial responsibility and a respect for the law.
Cost of Auto Dealer Bonds.
Jet works tirelessly to deliver the lowest auto dealer bond rates in the market. Personal credit score of the licensed dealer and number of years in business are the top two factors that determine the bond price.
|Price Tier*||Used / Wholesale Dealers||Trailer Dealers|
|Monthly | Annual||Monthly | Annual|
|Preferred||$24 | $281||$12 | $125|
|Standard||$63 | $750||$32 | $375|
|Credit Repair||$104 | $1125||$70 | $750|
*The bond pricing reflected above does not constitute an offer. Rates for dealer bonds are based on the dealership owner’s personal credit, years in business, etc.
Temporary Extension Lot Licenses Following the March 2019 Flood.
Due to the Governor’s Proclamation of Disaster Emergency of March 2019, motor vehicle and travel trailer dealers in the affected counties may apply for a temporary extension lot while damages from the flood are repaired. This license is available with no fee asked of affected dealers. To ensure that dealerships and surrounding areas have ample time to complete repairs, this license is binding through August 31st, 2019.
How Do Dealers Apply for a Bond?
To get a quote, you must first provide the necessary information. This information can be submitted to Jet by clicking the apply now button below and filling out the application. Once we have your quote ready, it will be sent to you to via email with the option to purchase it right from there.
|IA Auto Dealer Bond Applications|
|$75,000 Motor Vehicle Dealer or Manufacturer Bond|
|$25,000 Bond for Trailer Dealers|
What is Restricted Dealer Licensing?
Restricted dealer licenses can be issued only for:
- Fleet vehicle sales
- Dealers only selling motor vehicles available for purchase through lease agreements
- Dealers only selling repossessed vehicles, or vehicles obtained from security contracts, lien, or title retention instruments
- Insurers selling vehicles collected from a settlement
Restricted dealers must have a $75,000 motor vehicle surety bond to receive their license. To maintain the license, restricted dealers need an office with a land line phone, regular business hours, and zone approval. If regular business hours are not upheld, the license must be surrendered to the Office of Vehicle and Motor Carrier Services.
Claims Against a Dealer.
Iowa requires motor vehicle dealers to carry a bond to protect consumers from unethical dealer practices. The bond will cover loss or damages caused by a dealer that doesn’t comply with Iowa motor vehicle dealer regulations. For example, a claim can be filed against a dealer that doesn’t supply a valid title or tampers with the odometer.
If a complaint is filed by a consumer, the Iowa Bureau of Investigation and Identity Protection will decide if the case requires an investigation. The Bureau will inform the dealer whether the investigation will move forward or if there is not enough evidence for a case.
If the claim is proved to be valid, the bond will reimburse the consumer for any losses incurred. However, the dealer must still pay back the surety company for the amount of the claim.
Dealer License Checklist.
There are many items needed to become a licensed dealer in Iowa. The below list is meant to assist with obtaining these requirements:
- Bonding – $75,000 for motor vehicle dealers, $25,000 for travel trailer dealers
- Business office in an established location, with an active telephone line, open for business 32 hours Monday through Friday. Motorcycle dealers are exempt from the required hours
- Display facility meeting requirements
- Repair facility meeting requirements
- Zoning compliance
- Liability insurance covering $100,000 bodily injury or death to one person, $300,000 bodily injury to two or more people, and $50,000 injury or destruction of property of others.
- Pre-licensing education for used motor vehicle dealers and final stage manufacturer dealers. Exemptions for franchised dealerships, national or wholesale dealer-only auction companies, banks, credit unions, or savings and loan associations
- Criminal history report
- Corporation meets state requirements
- Proof of franchise agreements
- Site inspection by the Bureau of Investigation and Identity Protection