The Washington State Department of Licensing (DOL) requires a Washington Motor Vehicle Dealer Bond (also called a DMV Dealer, MVD, or Auto Dealer Bond) as part of the licensing process to operate as a motor vehicle dealer in the state.
Like other surety bonds, this bond is a contract between three parties: the principal (the motor vehicle dealer), the obligee (Washington DOL), and the surety company. As a legally authorized entity, the surety company assures the obligee that the principal will perform their obligations according to their licensing regulations and state laws.
If the principal operates fraudulently or fails to adhere to the laws, any injured party may file a claim against the principal’s bond. After an investigation into the validity of the claim, the surety will compensate the injured party up to the full amount of the bond (if the claim is valid). Business practices that may result in a claim can include fraud, late or incomplete tax payments, illegal selling practices, and license renewal violations, among others.
Contrary to insurance policies, the principal is responsible for reimbursing the surety company for the entirety of the claim payout, plus fees and expenses incurred by the surety during the investigation. This bond does not act as a form of insurance for the motor vehicle dealer.
Any business or individual who is applying for a motor vehicle dealer license in Washington is required to post a State Motor Vehicle Dealer Bond.
A motor vehicle dealer in Washington includes anyone involved in buying, selling, manufacturing, distributing, auctioning, brokering, leasing, or advertising vehicles. In addition, if you intend to sell more than four registered vehicles a year, engage in vehicle buying and selling for profit, or sell vehicles not registered in your name, you will need to obtain a license.
The Washington MVD Bond amount is set at $30,000. However, you are only required to pay a small percentage of the bond amount, called a premium. This premium rate is determined by your credit history, industry experience, and background. It is important to note that the soft credit check required to quote your bond will not harm your credit score.
Applicants with optimal credit may receive quotes as low as 1% of the bond amount. Even if you have nonstandard credit, we encourage you to apply for your free bond quote. At EZ Surety Bonds, we work with a variety of sureties to find you the best quote available.
The obligee (or entity) that requires the Washington Auto Dealer Bond is the Washington DOL. Below are their contact details:
Washington State
Department of Licensing
Business Licensing Service
PO Box 9020
Olympia, WA 98507
Phone: (360) 664-6466
Fax: (360) 586-1596
Applying for surety bonds with us is quick and easy. You can obtain your Washington DMV Dealer Bond by filling out our quick online form, and one of our friendly surety experts will contact you regarding your free quote within 24 hours.
We understand that surety bonding can be confusing. That’s why our friendly surety experts are always happy to assist. If you have any questions or concerns, please contact bonds@southcoastsurety.com or call 1-800-361-1720.
Obtaining a Washington State MVD License requires several steps. They are as follows:
The license is valid for one year from the date of issuance and must be renewed before it expires.
The Washington Auto Dealer Bond requires a $30,000 bond amount. Fortunately, the percentage you pay of that amount (called the premium rate) depends on your credit score and experience. If you have an optimal credit score, you may be able to obtain this bond for as little as 1% of the bond amount. Regardless of your credit score, we work with a variety of surety markets to provide competitive quotes. Simply fill out our quick online application today and one of our surety experts will contact you regarding your free quote within 24 hours!
After you purchase the bond, we will mail the original document to you. While most obligees insist on you filing the original bond with them, some may accept an electronic version.
Most often, the completed bond form, including the power of attorney and signature of the principal on the bond, should be mailed to the obligee. However, because every obligee has their own filing requirements, always confirm the bond filing 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.
