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Iowa surety bonds are required by many municipalities, as well as state agencies. Apply for an Iowa Surety Bond today! Single Source Insurance is a leading Iowa surety bond company. Apply easily online and take advantage of lowest rates. If you do not see the exact bond type you need, please contact us or complete a miscellaneous application.
Iowa auto dealer bonds are a type of license and permit surety bond intended to:
While there are several different types of motor vehicle dealer licenses, the bonding requirement applies primarily to auto and trailer dealers. Certain dealers with restricted licenses, such as dealers selling only repossessed vehicles or previously leased vehicles, may also be subject to bonding. The required Iowa auto dealer bond amount (the bond�s �penal sum�) is $75,000 for motor vehicle dealers and $25,000 for dealers selling only towable recreational vehicles.
Iowa auto dealer licenses are good for two years and expire on December 31 of every even-numbered year. A current Iowa auto dealer bond must be in force at all times to prevent license revocation.
The three parties to a legally binding Iowa auto dealer surety bond agreement are:
When damages result from the principal�s unlawful or unethical business practices, the obligee can file a claim for the payment of taxes, fees, or penalties owed by the principal or on behalf of consumers. For instance, damages could occur from failing to disclose prior accident or flood damage to a vehicle or tampering with a vehicle�s odometer. The terms of an Iowa auto dealer bond make the principal solely responsible for paying valid claims against the bond.
However, the surety typically pays valid claims on behalf of the principal, drawing on credit established for the principal at the time an Iowa auto dealer bond is issued. The principal is legally obligated to repay that debt to the surety. This arrangement ensures prompt payment of the claim while affording the principal the ability to repay the surety in manageable installments.
The surety calculates the premium cost for an Iowa auto dealer bond as a small percentage of the bond�s penal sum, the maximum amount that will be paid out on a claim. That percentage is the premium rate, which the surety will assign based primarily on the principal�s credit score.
A high credit score indicates that the risk associated with extending credit to the principal is low. This usually qualifies the principal for a standard market premium rate of between one and three percent. A low credit score is of greater concern to the surety, resulting in a higher premium rate.
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