There are three types of auto dealer bonds available in New York: $50,000 bond for franchise dealers, $20,000 bond for used dealers selling 50 vehicles or less per year, and $100,000 bond for dealers selling over 50 used vehicles per year. The bond requirement is enforced by the New York State Department of Motor Vehicles.
Any used or wholesale vehicle dealer must have a bond based on the number of cars sold in the previous year. Dealers who sold 50 or fewer cars must have a $20,000 bond, whereas dealers that sold more than 50 cars must secure a $100,000 bond. A franchised vehicle dealer must secure a $50,000 bond.
New York used auto dealers who sell 50 cars or less per year can purchase a surety bond for as low as $100. Auto dealer bond prices start at just $450 for those selling over 50 used cars per year. Franchise dealers can purchase an auto dealer bond for as low as $225.
The rates available depend on the bond limit of the dealership type and are expressed in the chart below. Other factors come into play as well, such as dealership owner credit score and years in business.
|Price Tier*||$20,000 Bond: 6-50 Vehicles Sold Per Year||$100,000 Bond: 51-100 Vehicles Sold Per Year||$50,000 Bond: Franchise Auto Dealers|
|Monthly | Annual||Monthly | Annual||Monthly | Annual|
|Preferred||$10 | $100||$38 | $450||$19 | $225|
|Standard||$32 | $375||$80 | $1000||$40 | $500|
|Credit Repair||$78 | $826||$152 | $1700||$94 | $1000|
A surety bond is one of the most critical steps to becoming an auto dealer, however, many forms are required in order for dealer licenses to be processed:
New York State does not require bonding for dealers selling vehicles over 10,000 pounds, motorcycles, trailers, boats, ATVs, and snowmobiles.
$20,000 Bond: 6-50 Vehicles Sold Per Year
$100,000 Bond: 51-100 Vehicles Sold Per Year
$50,000 Bond: Franchise Auto Dealers