How much does an auto dealer bond cost in Massachusetts?
Auto dealer surety bonds (also called motor vehicle dealer bonds) are mandated by the Massachusetts Registry of Motor Vehicles as part of the licensing requirements for used car dealerships and repair shops to conduct business in the state. The total bond amount is based on the type of business:
- $25,000 bonds for used motor vehicle dealers
- $10,000 bonds for repair chops
The surety company determines your premium rate, which is the percentage of the total bond amount you pay as the premium. Premium rates for Massachusetts 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 Massachusetts 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 Massachusetts.
- EZ Surety has issued repair shop surety bonds for premiums as low as $200.
Why are auto dealer bonds important in Massachusetts?
Massachusetts auto dealer bonds provide protection for customers, creditors, and the state government. When a Massachusetts motor vehicle dealer posts a surety bond, they provide a guarantee to the Massachusetts Registry of Motor Vehicles that they will conduct business in compliance with the conditions listed in Chapter 140, Section 58 of the Massachusetts General Laws.
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 Massachusetts
Unlike most states, Massachusetts auto dealer licenses are issued by local city and town jurisdictions instead of a statewide government agency. Auto dealers conducting business in several municipal jurisdictions must obtain a separate dealer license and surety bond for each city or town in which they have a place of business. Auto dealer applicants should contact their local government office for more information on the specific licensing requirements.