How much does an auto dealer bond cost in Wisconsin?
Auto dealer surety bonds (also called motor vehicle dealer bonds) are mandated by the Wisconsin Department of Transportation as part of the licensing requirements for dealerships to conduct business in the state. The DOT sets the total bond amount based on the type of dealership:
- $50,000 bonds for motor vehicle dealers
- $25,000 bonds for motor vehicle salvage dealers, wholesalers, auction dealers, and recreational vehicle dealers
- $5,000 bonds for moped dealers
The surety company determines your premium rate, which is the percentage of the total bond amount you pay as the premium. Premium rates for Wisconsin 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 Wisconsin 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 Wisconsin.
- EZ Surety has issued used car dealer bonds for premiums as low as $500.
Why are auto dealer bonds important in Wisconsin?
Wisconsin auto dealer bonds provide protection for customers, creditors, and the state government. When a Wisconsin 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 Chapter 218 Wisconsin Statutes.
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 Wisconsin
To obtain your auto dealer license in Wisconsin, you must meet the Wisconsin Department of Transportation licensing requirements by completing the following steps:
- Complete the dealer license application
- Post the appropriate surety bond
- Complete the owner statement
- Provide a copy of your sales tax permit
- Install the required signage at the established place of business
- Meet the zoning requirements
- Pay all application and licensing fees