How much does an auto dealer bond cost in Connecticut?
Auto dealer surety bonds (also called motor vehicle dealer bonds) are mandated by the Connecticut Department of Motor Vehicles (DMV) as part of the licensing requirements for car dealerships to conduct business in the state. The DMV sets the total bond amount based on the type of dealership license:
- $50,000 bonds for motor vehicle dealers
- $10,000 bonds for motor vehicle leasing or renting companies
- $5,000 bonds for motor vehicle repairers or limited repairers
The surety company determines your premium rate, which is the percentage of the total bond amount you pay as the premium. Premium rates for Connecticut 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 Connecticut 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 Connecticut.
- EZ Surety has issued motor vehicle dealer bonds for premiums as low as $250.
Why are auto dealer bonds important in Connecticut?
Connecticut auto dealer bonds provide protection for customers, creditors, and the state government. When a Connecticut motor vehicle dealer posts a surety bond, they provide a guarantee to the bond’s Obligee (the DMV) that they will conduct business in compliance with the conditions listed in the Connecticut General 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 Connecticut
To obtain your auto dealer license in Connecticut, you must meet the Connecticut DMV licensing requirements by completing the following steps:
- Complete and submit a dealer license application (form K7)
- Provide a trade name certificate
- Submit a financial responsibility certificate
- Post the appropriate surety Bond
- Complete the K200 VIN Etching Form
- Provide a copy of your driver’s license
- Pay all application and licensing fees