Montana Auto Dealer Bonds, and More

What you need to know about Montana Auto Dealer Bonds, and More

Montana Auto Dealer Bonds, and More

How much does an auto dealer bond cost in Montana?

Auto dealer surety bonds (also called motor vehicle dealer bonds) are mandated by the Montana Attorney General as part of the licensing requirements for dealerships to conduct business in the state. The Attorney General sets the total bond amount based on the type of dealership:

  • $50,000 bonds for new or used motor vehicle dealers, wholesale dealers, auto auction dealers, and new manufactured home dealers
  • $15,000 bonds for motorcycle and quadricycle dealers
  • $5,000 bonds for snowmobile, watercraft, and off-highway vehicle dealers

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

Montana auto dealer bonds provide protection for customers, creditors, and the state government. When a Montana motor vehicle dealer posts a surety bond, they provide a guarantee to the bond’s Obligee (the attorney general) that they will conduct business in compliance with the conditions listed in the Montana Code Annotated § 61-4-101(8).

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.

How to get your auto dealer license in Montana

To obtain your auto dealer license in Montana, you must meet the Montana Motor Vehicle Division licensing requirements by completing the following steps:

  • Complete the application for dealer licensing
  • Post the appropriate surety bond
  • Have a permanent business location to keep records
  • Provide proof of garage liability insurance
  • Post the appropriate surety bond
  • Pay all application and licensing fees