How much does an auto dealer bond cost in Virginia?
Auto dealer surety bonds (also called motor vehicle dealer bonds) are mandated by the Virginia Department of Motor Vehicles (DMV) as part of the licensing requirements for dealerships to conduct business in the state. The DMV sets the total bond amount based on the type of dealership:
- $50,000 bonds for motor vehicle dealers
- $25,000 bonds for dealers of trailers, travel trailers, motor homes, and motorcycles
The surety company determines your premium rate, which is the percentage of the total bond amount you pay as the premium. Premium rates for Virginia 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 Virginia 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 Commonwealth of Virginia.
- EZ Surety has issued motor vehicle dealer surety bonds for premiums as low as $500.
Why are auto dealer bonds important in Virginia?
Virginia auto dealer bonds provide protection for customers, creditors, and the state government. When a Virginia motor vehicle dealer posts a surety bond, they provide a guarantee to the Virginia Motor Vehicle Dealer Board (the bond’s Obligee) that they will conduct business in compliance with the conditions listed in Title 46.2, Chapter 15 of the Virginia Code.
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 Virginia
To obtain your auto dealer license in Virginia, you must meet the Virginia DMV licensing requirements by completing the following steps:
- Disclose whether you are an independent dealer-operator or a franchise dealer-operator
- Pass the required dealer test administered at your local DMV
- Ensure that the place of business complies with all local zoning regulations
- Submit the necessary application forms
- Pay all required fees
- Post the appropriate surety bond