Pennsylvania Motor Vehicle Dealer And Other Bonds

How much does an auto dealer bond cost in Pennsylvania?

Auto dealer surety bonds (also called motor vehicle dealer bonds) are mandated by the Pennsylvania 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 license:

• $30,000 bonds for motor vehicle dealers, manufacturers, and full issuing agents that sell vehicles and registration plates
• $30,000 bonds for full issuing agents that only sell registration plates
• $20,000 bonds for motor vehicle manufacturers or dealers that only sell vehicles
• $10,000 bonds for motor vehicle salvors

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

• EZ Surety has issued full agent bonds for premiums as low as $300.
• EZ Surety has issued motor vehicle dealer bonds for premiums as low as $180.
• EZ Surety has issued motor vehicle salvor bonds for premiums as low as $100.

Why are auto dealer bonds important in Pennsylvania?

Pennsylvania auto dealer bonds provide protection for customers, creditors, and the state government. When a Pennsylvania motor vehicle dealer posts a surety bond, they provide a guarantee to the state’s Department of Transportation (the Obligee) that they will conduct business in compliance with the conditions listed in the Statutes of Pennsylvania, Title 75.

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 Pennsylvania

To obtain your auto dealer license in Pennsylvania, you must complete and submit a mail or online application (Form SPOA 2602D) and provide the following documents:

• Original photographs of the place of business including a complete overall view showing display area and office
• A hand-drawn diagram on 8 ½” x 11” paper showing the complete property including locations of customer parking and dimensions of all buildings, offices, and display areas
• Copy of property deed or lease agreement indicating that the property has been rented for at least 6 months
• A copy of a telephone bill verifying installation of a business landline telephone at the proposed dealership address
• Documentation from your local municipality that shows the business location has proper zoning
• A copy of the Certificate of Occupancy issued by the Department of Labor and Industry
• or use an occupancy permit from your municipality
• A resume for each owner, partner, officer, or member showing their work history for the past 5 years.
• A completed Salesperson Initial License Application or Salesperson Change of Employer/Reactivation Application for each salesperson.
• State Police Background Check for each owner, partner, officer, or member from every state where the individual has lived in the past 5 years
• Business formation documentation including a photocopy of the approved articles of incorporation.

Car dealers must submit a $65 initial licensure fee with the license application and post the appropriate surety bond for each place of business.

Additional Resources

• Vehicle Dealership Initial Application
• Pennsylvania Manufacturer/Dealer/Full Agent/Card
• Agent/Messenger Service/Salvor Bond Form
• Requirements for Becoming a Dealer