What is a Virginia Motor Vehicle Dealer Bond?
The Virginia Motor Vehicle Dealer Board (MVDB) requires anyone who operates as a used motor vehicle dealer within the Commonwealth of Virginia to obtain a $50,000 surety bond as part of the licensing process.
The Virginia Motor Vehicle Dealer Bond, also called the Virginia Auto Dealer Bond, is a specific type of surety bond. A surety bond is a three-party contract between the principal, the obligee, and the surety company that writes the bond. The principal is the dealer required to get the bond, while the obligee is the entity that requires the bond (the MVDB).
The bond ensures that the motor vehicle dealer will act according to the laws and regulations of their trade. If they fail to act accordingly and someone suffers injuries (for instance, a customer), that injured party can file a claim against the dealer’s bond if the dealer fails to remedy the situation without the involvement of the surety company. If the surety finds the claim valid, they will compensate the injured party up to the bond amount. The motor vehicle dealer is financially responsible for reimbursing the surety for all valid claims, plus additional fees and expenses incurred.
Who has to get this bond?
To obtain a motor vehicle dealer license in Virginia, both new and used vehicle dealers must get bonded. This includes:
- Any person who buys, sells, exchanges, or permits the display for sale of new or used motor vehicles; and
- Any person who buys, sells, exchanges, or permits the display for sale of five or more motor vehicles within a year
You can find more information about bonding and licensing requirements in Chapter 15 of the Virginia Code, which establishes the requirement that auto dealers in the state must maintain a surety bond to protect any person who suffers financial loss due to unethical or unlawful business practices by the licensed dealer.
How much does this bond cost?
The Virginia Auto Dealer Bond has a required bond amount of $50,000. Fortunately, this is not the cost of your bond! What you pay for your bond is calculated as a percentage of the bond amount, primarily determined by a soft credit check. Applicants with excellent credit may see quotes starting around 1% of the bond amount.
However, we encourage you to apply for your free quote regardless of your credit score. At EZ Surety Bonds, we work with all types of credit and a variety of surety companies to try and find you the best quote possible. Also, because the credit check is a soft inquiry, it will not harm your score.
The obligee (the entity that requires the bond) for the VA Auto Dealer Bond is the Virginia Motor Vehicle Dealer Board (MVDB) of the Department of Motor Vehicles (DMV). The following is the contact information for the MVDB:
Virginia Motor Vehicle Dealer Board
2201 West Broad Street
Richmond, VA 23221
Phone: (804) 367-1100
How to get your Virginia Motor Vehicle Dealer Bond
We make sure that your surety bond application process is simple and quick. You can begin the bonding process today by completing the short online application on our website, which only takes a few minutes to complete.
If you have any questions along the way, feel free to contact us at email@example.com or call 1-866-546-4605. Apply for your free quote today!
Frequently asked questions
You must meet the following requirements to become a licensed auto dealer in Virginia:
• Determine your license type
• Get your business location
• Complete the pre-licensing course and exam
• Register your business
• Get general liability insurance
• Get a Virginia Auto Dealer Bond
• Submit license application
• Pay all applicable fees
Finally, before the MVDB can issue your auto dealer license, they will inspect your business location.
Our comprehensive guide provides step-by-step instructions on obtaining a Virginia auto dealer license if you want more detailed information.
The Virginia Motor Vehicle Dealer Board requires all motor vehicle dealer applicants to obtain a surety bond of $50,000. How much you pay for your bond is primarily dependent upon your credit score (using a soft credit check). Applicants with optimal financials and credit may see premium quotes starting as low as 1% of the bond amount. If you have nonstandard credit, we still encourage you to apply. We work with several surety companies to find you the best quote available.
After you purchase your Auto Dealer Bond with EZ Surety Bonds, we will mail you the original document. Some obligees require you to file the original bond with them (sometimes signed by the principal), while others allow you to file an electronic version. Always verify your obligee’s bond filing requirements before you do anything with your bond.