Motor vehicle dealers are required to have a surety bond as part of their licensing requirements in Louisiana. Auto Dealer Bonds are used by Louisiana as a tool to ensure financial stability and accountability for licensed vehicle dealers.
There is no better partner than Jet Insurance Company when it comes to surety bonds. Get a quote in minutes and save on your bond requirement!
There are over a dozen different license types regulated by two different commissions:
Jet’s expertise and direct model provide you with the quickest service at great rates no matter what type of bond you need.
The cost is dependent on the bond type, limit, years in business, and personal credit of the applicant. For the $50,000 Used Auto Dealer Bond the price starts at $28 monthly or $490 for a 2-year term. Prices start at $11 monthly or $196 for 2 years for brokers, recreational, specialty, and new dealers needing the $20,000 bond.
|Used Motor Vehicle Dealer||$50,000||$28||$280||$490|
|New Motor Vehicle Dealer||$20,000||$11||$112||$196|
|Recreational Product Dealer||$20,000||$11||$112||$196|
|Recreational Product Dealer - Used||$10,000||$10||$100||$175|
|Specialty Vehicle Dealer||$20,000||$11||$112||$196|
|Specialty Vehicle Dealer - Used||$10,000||$10||$100||$175|
The Used Motor Vehicle Commission requires Auctions, Daily Rental and Rent with Option to maintain a $50,000 surety bond which starts at $28 monthly or $490 for 2-years. The Louisiana Motor Vehicle Commission requires facilities, warranty, repair centers, and remanufactured, reconditioned, or rebuilt wholesalers to also have a surety bond. Below you can see where those bond prices start for preferred tier applicants.
|Rent with the Option to Purchase||$50,000||$28||$280||$490|
|Dealer Used Motor Vehicle Facility||$10,000||$10||$100||$175|
|Lessor Used Motor Vehicle Facility||$10,000||$10||$100||$175|
|Lessor Used Motor Vehicle Facility |
|Satellite Warranty and Repair Center||$20,000||$11||$112||$196|
|*Underwriter Review Required|
Monthly options for surety bonds are unique at Jet Insurance Company and we hope others start offering it soon, as it creates a great option for dealers to avoid large annual payments and to only have a bond when needed. For example, Louisiana has common expiration dates for the bond (see more below), so you can get a monthly bond for part of the year until the license renewal date hits.
In order to get the best rate for the bond, applicants need to have a good credit score and several years of experience. This means your price will go down as you stay in business and keep your credit in good standing.
The Louisiana State Legislature wants dealers and other vehicle-related businesses to operate with integrity and financial stability. The bond requirement assists in this goal. You can see the details by referring to Louisiana Revised Statute Title 32 Chapter 4 for bonds under the Used Motor Vehicle Commission and Louisiana Revised Statute Title 32 Chapter 6 for bonds with the Motor Vehicle Commission. The Legislature creates the laws that put the Commissions into existence, the license requirements they oversee, and the surety bond requirements.
The surety bond provides a gap in coverage that is not available in all other forms of typical business insurance. Bonds protect the public and the commissions from financial damage caused by the licensee.
And this is not the accidental kind of damage, but negligent or fraudulent behavior, such as failure to transfer title, pay sales tax, pay registration fees, etc. The public or the commission will come after the dealer for damages. However, the dealer will choose not to or cannot make restitution. The surety bond is the guarantee a third-party financial institution (Jet) will make restitution.
Louisiana Motor Vehicle Commission
This Commission is based out of Metairie and what they may be lacking on their website, is more than made up for by their service.They oversee many different license types and below are licenses that need a surety bond:
All bonds (except the Remanufactured license bond) can be purchased in a minute or two online. Once the bond is purchased, Jet will send the original bond to the licensee for a counter signature. You can request overnight delivery during checkout.
New licensees must file the surety bond with their application packet. Current licensees can file a bond purchased with a new surety company upon the license renewal with their other license renewal paperwork. If the bond is just a renewal with Jet, a bond continuation form will be sent to you to be filed, much like an original bond form.
This Commission can be found at the following address:
Louisiana Motor Vehicle Commission
3017 Kingman St
Metairie, LA 70002
Louisiana Used Motor Vehicle Commission
This Commission is based out of Baton Rouge, and while it may deal with less license types than the other commission, used dealers make up more than that in how interesting they can be! The Used Commission has oversight over the following licenses with bonding needs:
Same as dealing with the other commission, licensees will receive the original bond form with a seal from Jet in the mail after purchase (overnight available). This bond form must be filed with the application or renewal packet. If the bond is renewed Jet will send the continuation certificate for filing. Renewal is simply done by making on-time payments whether annual or continued monthly payments.
The Used Commission is at the address below:
Louisiana Used Motor Vehicle Commission
3132 Valley Creek Drive
Baton Rouge, LA 70808
“How a bond is renewed” is the easy part, so let’s start there. Jet will send you a reminder prior to the bond’s expiration date. All you need to do is make payment over the phone at (225) 465-8981, online in a link we email to you, or in the reply envelope sent to you via standard mail.
Those on monthly payments just need to keep making payments on time. Jet will send you the continuation certificate well before the time you need to file the form to the Commission. The schedule on when licenses renew and consequently replacement bonds or continuation certificates are filed is below for each Commission. There are key differences, so be sure to read up on your specific bond’s Commission.
Used Motor Vehicle Commission
To sum it up, your license with the Used Motor Vehicle Commission is set to renew every two years in December. But depending on which District your Parish is in you may have to renew in an even or an odd year. Further below illustrates which Parish is in which District. This is for the Used, Auction, and Rental Dealer licenses.
Renews in Even Numbered Years (Dec. 31 2022, Dec. 31 2024…)
Renews in Odd Numbered Years (Dec. 31 2023, Dec. 31 2025…)
Motor Vehicle Commission
You will notice the districts and renewal dates are different for this commission, but the idea is the same. Your license is renewed and a bond is filed every two years depending on what parish you are in. This is for the New, Specialty, Recreational, Facility, Warranty, Repair, Broker, and Remanufactured Licenses.
Renews in Even Numbered Years
Renews in Odd Numbered Years
Good news: if you sell less than five cars a year then you do not need to be a licensed dealer.
Bad news: each location needs to have a surety bond, meaning you cannot have all your locations under the hood of one surety bond.
Good news: with Jet, you deal directly with the surety carrier without middleman brokers and agents—our service is quicker and there are never additional fees to the premium.
Bad news: licensees need to have proof of a Garage Liability Policy. But dealers should probably have one anyway to protect against risk to property and people.