A $25,000 Massachusetts Auto Dealer Bond, commonly known as the Second Hand Motor Vehicle Dealer Bond, is required for all used vehicle dealers to be licensed. Bonds provide a means of restitution to the public if they suffer monetary loss at the hands of an auto dealer.
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A surety bond is a requirement to become and maintain a dealership, along with many other rules and regulations laid out in the Massachusetts General Laws Title XX, Chapter 140, Section 58.
The surety bond involved three parties: the obligee (State of Massachusetts) the principal (dealer) and the surety company (Jet). The bond serves as a guarantee to the State that should any dealer deception or negligence lead to financial damage, funds are available to be paid out to the harmed individual or entity.
Jet is the financial backer in the event of a claim, however, the dealer is not off the hook at this time and must reimburse Jet—more information on claim payouts is available in the Bond Claim Process article.
The first step is filling out the online application:
After this, you can download a copy of the bond for your records. Jet will send you the original signed and sealed form for filing. Where the bond is filed depends on your location—view the list of Business to Business Service Locations.
For more information on dealer licensing, visit the Massachusetts Registry of Motor Vehicles Dealer Information page.