Rhode Island Auto Dealer Bonds, and More

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Learn more about Rhode Island Auto Dealer Bonds, and More

How much does an auto dealer bond cost in Rhode Island?

Auto dealer surety bonds (also called motor vehicle dealer bonds) are mandated by the Rhode Island Dealers’ License and Regulations Office as part of the licensing requirements for dealerships to conduct business in the state. The License and Regulations Office sets the total bond amount at $50,000.

The surety company determines your premium rate, which is the percentage of the total bond amount you pay as the premium. Premium rates for Rhode Island 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 Rhode Island 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 Rhode Island?

Rhode Island auto dealer bonds provide protection for customers, creditors, and the state government. When a Rhode Island motor vehicle dealer posts a surety bond, they provide a guarantee to the bond’s Obligee (the License and Regulations Office) that they will conduct business in compliance with the conditions listed in the provisions of Chapter 1499 Public Laws 1956.

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 Rhode Island

To obtain your auto dealer license in Rhode Island, you must meet the Rhode Island Dealers’ License and Regulations Office licensing requirements by completing the following steps:

  • Submit an application to the Rhode Island Division of Motor Vehicles (DMV)
  • Have the name of the dealership approved by the Rhode Island Dealers’ License and Hearing Board
  • Post the $50,000 surety bond
  • Submit a Bureau of Criminal Identification Authorization form
  • Provide a copy of the dealership’s lease agreement including the property’s square feet dimensions
  • Provide proof of zoning approval
  • Provide pictures of the established place of business
  • Pay all application and licensing fees