The New York Department of State, Division of Licensing Services, requires automobile broker businesses operating within the state to obtain the New York Automobile Brokers Bond to qualify for a business license.
A surety bond typically consists of three parties: the principal (automobile broker), the obligee (New York Division of Licensing Services), and the surety company.
Automobile brokers must have a bond to guarantee that they adhere to state laws and licensing regulations. As intermediaries between retail customers and dealerships, automobile brokers charge fees for their services. Bonds help mitigate the risk of a dishonest broker taking advantage of their clients.
If the bonded business causes injury to someone, the injured party can file a claim against the business’s bond. After an investigation into the validity of the claim, the surety company may compensate the injured party up to the total bond amount. Unlike an insurance policy, the principal must reimburse the surety for all claims paid out plus related costs.
The New York Department of State requires all automobile brokers to obtain an auto broker bond as part of their licensing requirements.
An automobile broker is any individual who, in exchange for payment from a customer, offers to provide or provides services such as purchasing, arranging, assisting, or facilitating the purchase of a motor vehicle as an agent, broker, or intermediary.
The key difference between an automobile broker and a motor vehicle dealer is that the broker serves as a middleman between the dealer and the consumer.
The New York Motor Vehicle Broker Bond has a required bond amount of $100,000. Fortunately, you only need to pay a small percentage of this amount, called a premium. Your premium rate is determined by your credit score and business experience.
With excellent credit, applicants may find quotes as low as 0.75% - 1% of the bond amount. For applicants with nonstandard credit, EZ Surety Bonds has partnered with various sureties to find you the best quotes available. It is important to note that a credit check is required to quote your bond; this soft credit check will not harm your credit score.
The obligee, or entity that requires the New York Automobile Brokers Bond, is the New York Department of State, Division of Licensing Services. Here are their contact details:
New York State
Department of State
Division of Licensing Services
99 Washington Avenue
One Commerce Plaza 6th Floor
Albany, NY 12231
Phone: (518) 474-4429
Applying for surety bonds is hassle-free with EZ Surety Bonds. Simply visit our website and fill out our quick online form. Within 24 hours, one of our friendly surety experts will contact you regarding your free quote.
Have questions? We’re happy to help answer them! Contact us via email at bonds@southcoastsurety.com or give us a call at 1-800-361-1720.
Obtaining a state license from the New York Division of Licensing Services is mandatory before engaging in auto broker activities. To begin licensing, you must:
While the broker license is valid for two years, the Automobile Broker Bond is only valid for one year and must be renewed annually to maintain an active license.
With a required bond amount of $100,000, the cost to purchase a New York Automobile Brokers Bond is based on your credit score and experience. Applicants with optimal credit and business experience may find quotes starting as low as 0.75% - 1% of the bond amount.
For applicants with nonstandard credit, we still encourage you to apply! EZ Surety Bonds is partnered with a significant number of reputable sureties to provide you with the best quotes. Remember that the soft credit check to quote your bond will not harm your credit score.
After purchasing your State of New York Automobile Brokers Bond, we will mail the original document to you. While some obligees may accept an electronic copy, most obligees require you to file the original bond document with the principal’s wet signature. However, because every obligee has their own unique filing requirements, be sure to confirm these requirements with your obligee before doing anything with your bond.
You’ll know if you need a surety bond because some entity will have required you to obtain one. They must also inform you of which specific bond type you’ll need. There are thousands of bonds across the country, all of which vary by state and industry.
Visit EZSuretyBonds.com to browse hundreds of bonds by state, type, or industry.
