How much does an auto dealer bond cost in Vermont?
Auto dealer surety bonds (also called motor vehicle dealer bonds) are mandated by the Vermont 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 number of vehicles the dealer has sold during the past two years:
- $20,000 bonds for motor vehicle dealers that sell less than 25 vehicles
- $25,000 bonds for motor vehicle dealers that sell between 25 and 100
- $30,000 bonds for motor vehicle dealers that sell between 101 and 250 vehicles
The surety company determines your premium rate, which is the percentage of the total bond amount you pay as the premium. Premium rates for Vermont 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 Vermont 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 Vermont?
Vermont auto dealer bonds provide protection for customers, creditors, and the state government. When a Vermont motor vehicle dealer posts a surety bond, they provide a guarantee to the bond’s Obligee (the DMV) that they will conduct business in compliance with the conditions listed in 23 V.S.A. Chapters 7 and 21 of the annotated Vermont Statutes Annotated.
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 Vermont
To obtain your auto dealer license in Vermont, you must meet the Vermont DMV licensing requirements by completing the following steps:
- Complete the application for a dealer license
- Post the appropriate surety bond
- Provide a copy of your sales tax license
- Provide a copy of your credit report
- Complete a background check
- Pay all licensing and application fees