How much does an auto dealer bond cost in Maryland?
Auto dealer surety bonds (also called motor vehicle dealer bonds) are mandated by the State of Maryland Motor Vehicle Administration (MVA) as part of the licensing requirements for dealerships to conduct business in the state. The MVA sets the total bond amount based on the type of dealership license and the number of vehicles sold during the previous year. Bond amounts for new and used motor vehicle dealers can range from $15,000 to $300,000.
The surety company determines your premium rate, which is the percentage of the total bond amount you pay as the premium. Premium rates for Maryland 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 Maryland 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 Maryland.
- EZ Surety has issued $15,000 used car dealer bonds for premiums as low as $225.
Why are auto dealer bonds important in Maryland?
Maryland auto dealer bonds provide protection for customers, creditors, and the state government. When a Maryland motor vehicle dealer posts a surety bond, they provide a guarantee to the bond’s Obligee (the Maryland MVA) that they will conduct business in compliance with the conditions listed in the Sections of the Transportation Article, of the Annotated Code of Maryland.
If the auto dealer fails to comply with the code, 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 Maryland
To obtain your auto dealer license in Maryland, you must meet the Maryland MVA licensing requirements by completing the following steps:
- Submit the Application for Vehicle Dealers License (Form CS-042).
- Submit a zoning approval form
- Submit the Department of Assessment and Taxation form
- Complete a dealer site inspection
- Submit the repair facility contract (if applicable)
- Complete a dealer orientation request
- Provide a copy of your Electronic Registration and Titling (ERT) contract
- Complete a criminal background check
- Post a surety bond of vehicle or trailer dealer
- Provide proof of workers’ compensation insurance
- Provide a copy of your trader’s license
- Submit a copy of your use and occupancy permit
- Provide franchise approval from the manufacturer
- Submit a New Vehicle Certification Form (if applicable)