How much does an auto dealer bond cost in Washington D.C.?
Auto dealer surety bonds (also called motor vehicle dealer bonds) are mandated by the Washington Department of Consumer and Regulatory Affairs and the Department of Motor Vehicles (DMV) as part of the licensing requirements for new and used car dealerships. The DMV sets the total bond amount at $25,000.
The surety company determines your premium rate, which is the percentage of the total bond amount you pay as the premium. Premium rates for DC auto dealer bonds typically cost between 1% and 5% 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 DC auto dealer bond. EZSurety still offers competitive rates to individuals with low credit scores or other financial issues.
Why are auto dealer bonds important in Washington D.C.?
DC auto dealer bonds provide protection for customers, creditors, and the district government. When a Wyoming motor vehicle dealer posts a surety bond, they provide a guarantee to the DMV that they will conduct business in compliance with the conditions listed in the District of Columbia Municipal Regulations, Title 18.
If the auto dealer fails to comply with the conditions, 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.