How much does an auto dealer bond cost in Oregon?
Auto dealer surety bonds (also called motor vehicle dealer bonds) are mandated by the Oregon Department of Transportation as part of the licensing requirements for dealerships to conduct business in the state. The Department of Transportation sets the total bond amount based on the type of dealership:
- $50,000 bonds for new and used motor vehicle dealers
- $10,000 bonds for dealerships that only sell mopeds, snowmobiles, or ATVs
- $10,000 bonds for wreckers, dismantlers, and rebuilders
The surety company determines your premium rate, which is the percentage of the total bond amount you pay as the premium. Premium rates for Oregon 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 Oregon auto dealer bond. EZSurety still offers competitive rates to individuals with low credit scores or other financial issues.
Why are auto dealer bonds important in Oregon?
Oregon auto dealer bonds provide protection for customers, creditors, and the state government. When an Oregon motor vehicle dealer posts a surety bond, they provide a guarantee to the bond’s Obligee (the Department of Transportation) that they will conduct business in compliance with the conditions listed in Oregon Vehicle Code, ORS 822.030(2).
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.
How to get your auto dealer license in Oregon
To obtain your auto dealer license in Oregon, you must meet the Oregon Department of Transportation licensing requirements by completing the following steps:
- Complete the application for dealer licensing
- Provide a copy of your photo ID
- Post the appropriate surety bond
- Provide a copy of your liability insurance certification
- Meet all dealer education requirements