How much does an auto dealer bond cost in New York?
Auto dealer surety bonds (also called motor vehicle dealer bonds) are mandated by the New York State Department of Motor Vehicles (DMV) as part of the licensing requirements for dealerships to conduct business in the state. The DMV sets the total bond amount based on the type of dealership license and the dealer’s annual number of vehicle sales:
- $100,000 bonds for motor vehicle dealers selling more than 50 vehicles a year
- $100,000 bonds for automobile brokers
- $20,000 bonds for motor vehicle dealers selling less than 50 vehicles a year
The surety company determines your premium rate, which is the percentage of the total bond amount you pay as the premium. Premium rates for New York 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 New York 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 New York.
- EZ Surety has issued $20,000 motor vehicle dealer surety bonds for premiums as low as $200.
- EZ Surety has issued automobile brokers bonds for premiums as low as $940.
- EZ Surety has issued $100,000 motor vehicle dealer surety bonds for premiums as low as $917.
Why are auto dealer bonds important in New York?
New York auto dealer bonds provide protection for customers, creditors, and the state government. When a New York motor vehicle dealer posts a surety bond, they provide a guarantee to the New York DMV that they will conduct business in compliance with the conditions listed in the New York Vehicle and Traffic Law.
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 New York
To obtain your auto dealer license in New York, you must submit the original facility application (Form VS-1) to the Department of Motor Vehicles along with the following documents:
- New York Motor Vehicle Dealer Bond as required under Traffic Law Section 415(6-b)(Form VS-3)
- Dealer license, application, and business fees
- Business property ownership information
- Copies of valid government-issued identification for all business owners
- Certificate of Authority from the New York State Department of Taxation and Finance