How much does an auto dealer bond cost in Utah?
Auto dealer surety bonds (also called motor vehicle dealer bonds) are mandated by the Utah Motor Vehicle Enforcement Division (MVED) as part of the licensing requirements for dealerships to conduct business in the state. The MVED sets the total bond amount based on the type of dealership:
- $75,000 bonds for new or used motor vehicle dealers or large trailer dealers
- $20,000 bonds for body shops
- $5,000 bonds for small trailer dealers and crushers
The surety company determines your premium rate, which is the percentage of the total bond amount you pay as the premium. Premium rates for Utah 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 Utah auto dealer bond. EZSurety still offers competitive rates to individuals with low credit scores or other financial issues.
Below are the lowest premiums EZ Surety has issued for auto dealer surety bonds in the State of Utah.
- EZ Surety has issued used car dealer bonds for premiums as low as $368.
Why are auto dealer bonds important in Utah?
Utah auto dealer bonds provide protection for customers, creditors, and the state government. When a Utah motor vehicle dealer posts a surety bond, they provide a guarantee to the bond’s Obligee (the MVED) that they will conduct business in compliance with the conditions listed in Chapter 3, Title 41 of the Motor Vehicle Business Regulation Act.
If the auto dealer fails to comply with the act, 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 Utah
To obtain your auto dealer license in Utah, you must meet the Utah Motor Vehicle Enforcement Division licensing requirements by completing the following steps:
- Complete the application for dealer licensing
- Post the appropriate surety bond
- Provide photographs of the business location
- Complete a pre-licensing training seminar
- Provide completed FBI fingerprint cards
- Provide proof of sales tax number from Utah State Tax Commission
- Pay all application and licensing fees