Utah laws state that auto dealers must be bonded as one of the license requirements. Requirements are overseen by the Utah State Tax Commission, Motor Vehicle Enforcement Division. Bonding brings protection to the consumer in the case that a dealer acts unethically, resulting in financial loss to the consumer. The bond will reimburse the consumer if a claim against the dealer is valid, but the dealer will need to repay the surety the amount of the claim.
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There are many types of dealers in Utah, but not all need a bond. New and used auto dealers must carry a $75,000 bond. Large trailer dealers (selling trailers over 2,000 pounds) are also required to have a $75,000 bond. Motorcycle, ATV, snowmobile, and small trailer dealers (under 2,000 pounds), as well as crushers, are all required to have a $10,000 bond. Body shops have a bond limit of $20,000.
Bonding provides coverage while only needing a small percentage of the cost. The dealer will only have to pay a large sum if there is a valid claim against the dealer.
By choosing Jet, you will receive the lowest rate available. We work with many insurance companies to keep costs low.
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In order to receive a license, dealers must:
Within 5-10 days of receiving the application, the Motor Vehicle Enforcement Division will inspect the dealership to make sure it complies with standards. If the criteria are met, the MVED will issue a license for the dealership.
All licenses issued by the Motor Vehicle Enforcement Division expire on June 30 every year. License renewals have similar requirements, but a 3-hour course covering new information replaces the 8-hour initial training course.
A claim would prove valid if the dealer deliberately does not correctly record the terms of the transaction or if the vehicle is rebuilt, sell a vehicle with financing paperwork that doesn’t match the vehicle sold, or violate the loan or lease agreement on a vehicle.