Auto dealer surety bonds (also called motor vehicle dealer bonds) are mandated by the Motor Vehicle Industry Licensing Board of Hawaii as part of the licensing requirements for dealerships to conduct business in the state. The Licensing Board sets the total bond amount based on the dealer's annual number of vehicle sales:
The surety company determines your premium rate, which is the percentage of the total bond amount you pay as the premium. Premium rates for Hawaii auto dealer bonds typically cost between 1% and 3% of the total bond amount.
During the application process, the surety company evaluates your personal credit, financial statements, industry experience, and licensing history. Applicants with good credit generally receive the lowest rates, however, bad credit will not prevent you from securing a Hawaii auto dealer bond. EZSurety still offers competitive rates to individuals with low credit scores or other financial issues.
Hawaii auto dealer bonds provide protection for customers, creditors, and the state government. When a Hawaii motor vehicle dealer posts a surety bond, they provide a guarantee to the Motor Vehicle Industry Licensing Board of Hawaii (the bond’s Obligee) that they will conduct business in compliance with the conditions listed in Chapter 437 of the Hawaii Revised Statutes.
If the auto dealer fails to comply with the statutes, the surety company will pay out financial losses to damaged parties up to the full bond amount. The auto dealer is liable to reimburse the surety for any damages paid under the bond.
To obtain your auto dealer license in Hawaii, you must meet the Hawaii Department of Commerce and Consumer Affairs licensing requirements by completing the following steps: