Auto dealer surety bonds (also called motor vehicle dealer bonds) are mandated by the Idaho Transportation Department as part of the licensing requirements for dealerships to conduct business in the state. The Transportation Department sets the total bond amount based on the type of dealership:
The surety company determines your premium rate, which is the percentage of the total bond amount you pay as the premium. Premium rates for Idaho 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 an Idaho auto dealer bond. EZSurety still offers competitive rates to individuals with low credit scores or other financial issues.
Idaho auto dealer bonds provide protection for customers, creditors, and the state government. When an Idaho motor vehicle dealer posts a surety bond, they provide a guarantee to the bond's Obligee (the Transporation Department) that they will conduct business in compliance with the conditions listed in the Idaho Code.
If the auto dealer fails to comply with the conditions, 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 Idaho, you must meet the Idaho Transportation Department licensing requirements by completing the following steps: