Apply for a Minnesota Surety Bond today! Single Source Insurance is a leading MN surety bond company. Apply easily online and take advantage of lowest rates. Quickly browse the bonds we offer in this state, or contact us for a full list.
In Minnesota,�if you sell more than five motor vehicles a year, you must become licensed as an auto dealer. And in order to become licensed as an auto dealer, you must purchase a Minnesota auto dealer bond. This is a type of license and permit bond that protects the state and consumers against losing money due to your violation of state laws. The bond must be submitted along with your application for a new or renewal license.
Bond Penalty Amount:�$50,000 (new & used)
Bond Term:�1 year
Bond Expiration Date:��Varies
Who Needs Them?
Minnesota distinguishes between dealers who sell new and/or used cars and those who sell boats, snowmobiles, horse trailers, or motor bikes. Our focus here is on auto dealer bonds. If you are seeking a license as an auto dealer in Minnesota, continue reading to learn more about the bonding requirements you must meet.
This bond is required by the State of Minnesota Department of Public Safety, Driver and Vehicle Services, for the following license types:
New Vehicle Dealer
Used Vehicle Dealer
Wholesaler
Broker
Lessor
Auction
Salvage Pool
In order to maintain your dealer license with the State of Minnesota you must keep your surety bond in good standing.
How Do They Work?
All surety bond contracts involve three parties: the obligee, the principal, and the surety. In the case of a Minnesota dealer bond, the following parties are involved:
The Minnesota Department of Public Safety, Driver and Vehicle Services is the obligee, the party requiring the bond.
The auto dealer is the principal purchasing the bond.
The surety is the company issuing the bond to a given individual.
The state has established a required bond amount (also known as the penal amount) of $50,000. Anyone who suffers a financial loss as the result of the principal�s unlawful actions may file a claim against the bond up to that required bond amount. After investigating to ensure that a claim is valid, the surety will make payment to the claimant, as a matter of expedience. However, the bond contract�s indemnity clause lays the responsibility for paying claims on the shoulders of the principal, who must reimburse the surety for the full amount paid to the claimant.
What Do They Cost?
The premium you will pay for the bond is only a small percentage of the total required bond amount. You can expect to pay anywhere between .75% to 5% of the bond penalty amount ($375 to $2,500) if you maintain good credit. Applicants with credit issues (e.g., bankruptcies, civil judgments, tax liens, etc.) may pay a higher premium.
After You Purchase Your Bond
After you receive your vehicle dealer bond from Single Source Insurance, you will need to file it along with the attached power of attorney with:
Minnesota Department of Public Safety
Dealer and Vehicle Services
445 Minnesota St
Suite 186
St Paul, MN 55101
Apply Now
When you work with Single Source Insurance, you can rely on our experienced professionals to get you the best possible rate on your Minnesota auto dealer bond.
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Frequently Asked Questions
What are the auto dealer bond requirements in California?
The auto dealer bond requirements in California mandate that all licensed auto dealers must obtain a surety bond to operate legally. The bond amount varies based on the dealer's classification and ensures compliance with state regulations.
What factors affect auto dealer bond rates?
The factors that affect auto dealer bond rates include the applicant's credit history, years of experience, and the type of dealer license. Rates can also vary based on the bond amount required by the state.
How much does an auto dealer bond cost in Texas?
The cost of an auto dealer bond in Texas varies based on factors such as the applicant's credit history and the bond amount required, typically ranging from $100 to $500 annually.
What are the eligibility criteria for a Minnesota auto dealer bond?
To obtain a Minnesota auto dealer bond, individuals must be licensed as new vehicle dealers, used vehicle dealers, wholesalers, brokers, lessors, or salvage pool operators by the Minnesota Department of Public Safety, Driver and Vehicle Services.
What is the bond amount for new car dealers in Illinois?
The bond amount for new car dealers in Illinois is $20,000. This bond is required by the Illinois Secretary of State to ensure compliance with state laws and regulations governing the sale of new motor vehicles.
What is the average cost of an auto dealer bond?
The average cost of an auto dealer bond in Minnesota ranges from $100 to $2,500 annually, depending on factors such as the applicant's credit history and bond amount required by the state.
How do I calculate my auto dealer bond cost?
The auto dealer bond cost is calculated based on the bond amount required by the state and your personal credit profile. Factors like your credit score, financial history, and business experience determine the premium rate you'll pay for the bond.
How do I apply for a Minnesota auto dealer bond?
To apply for a Minnesota auto dealer bond, you need to file the bond along with the attached power of attorney with the Minnesota Department of Public Safety, Dealer and Vehicle Services.
How much does a Minnesota auto dealer bond cost?
The cost of a Minnesota auto dealer bond varies based on factors such as the applicant's credit profile, the bond amount required, and the surety company. Typically, the annual premium ranges from $100 to $500.
What documents are required for a Minnesota auto dealer bond?
For a Minnesota auto dealer bond, the required documents include the surety bond contract, power of attorney, and filing the bond with the Minnesota Department of Public Safety, Dealer and Vehicle Services.
What is the Minnesota auto dealer bond amount?
The Minnesota auto dealer bond amount varies depending on the type of dealer license, but typically ranges from $10,000 to $50,000. The specific bond amount is set by the Minnesota Department of Public Safety, Driver and Vehicle Services.
What additional documents do I need for bonding?
The additional documents needed for bonding typically include a completed application, a copy of your driver's license, proof of business registration, and financial statements or tax returns.
How long is an auto dealer bond valid?
The auto dealer bond is valid for the duration of the dealer's license, which is typically one year. The bond must be renewed annually to maintain the dealer's license in the state of Minnesota.
Are there different bond types for auto dealers?
In Minnesota, there are different surety bond types required for auto dealers, including New Vehicle Dealer, Used Vehicle Dealer, Wholesaler, Broker, Lessor, and Auction Salvage Pool bonds.
What are the renewal requirements for dealer bonds?
The renewal requirements for dealer bonds in Minnesota are that licensees must maintain their surety bond in good standing with the Minnesota Department of Public Safety, Driver and Vehicle Services to renew their dealer license.
How can I reduce my bond cost?
To reduce your bond cost, you can consider improving your credit score, providing collateral, or working with an experienced surety bond provider to get the best possible rate.
Do dealer bonds cover liability claims?
Dealer bonds do not cover liability claims. Dealer bonds are required by the state to protect consumers from financial harm caused by the dealer's actions, not to cover general liability.
What happens if a bond is canceled?
If a bond is canceled, the principal must obtain a new bond or the license may be suspended or revoked by the obligee until a valid bond is in place.
Are there penalties for not having a bond?
Yes, there can be penalties for not having a required surety bond. Failure to maintain a valid dealer bond may result in fines, suspension or revocation of your dealer license by the state.
How do I choose a bonding company?
When choosing a bonding company, consider its reputation, financial stability, and customer service. Select a provider that offers competitive rates and understands the specific requirements for your industry.
What factors influence my bonding company choice?
The factors that influence your bonding company choice include the bond rate, the company's reputation, its customer service, and its financial stability. These factors will determine the reliability and cost-effectiveness of the bond.
What is required to maintain bond compliance?
To maintain bond compliance, you must keep your surety bond in good standing with the Minnesota Department of Public Safety, Driver and Vehicle Services, the obligee requiring the bond.
Can I transfer my bond to another dealer?
You cannot transfer your Minnesota auto dealer bond to another dealer. The bond is issued specifically for the licensed dealer named on the bond, and it cannot be transferred to a different dealer.
How often do bond rates change?
Bond rates can change frequently, often multiple times per day, as they are influenced by various economic factors such as interest rates, inflation, and market conditions.
What are common reasons for bond denial?
Common reasons for bond denial include an applicant's poor credit history, such as bankruptcies, civil judgments, or tax liens, as well as any past violations or issues related to the applicant's business operations.
Is a credit check necessary for bonding?
A credit check may be necessary for bonding, as applicants with credit issues such as bankruptcies, civil judgments, or tax liens may be required to provide additional information or meet specific requirements to obtain a bond.
What is the minimum bond amount in California?
The minimum bond amount required in California for a vehicle dealer license is $50,000.
How to verify a bonding company’s reputation?
Verifying a bonding company's reputation involves checking their financial stability, claims history, and customer reviews to ensure they can fulfill their obligations and provide reliable service.
Can I get a bond without a business license?
No, you cannot get a bond without a business license. A business license is typically required to obtain a surety bond, as the bond is intended to protect the public when dealing with a licensed business.
What is the process for bond claims?
The process for bond claims involves the surety investigating the validity of the claim and making payment to the claimant, with the principal responsible for reimbursing the surety for the full amount paid.
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Minnesota Auto Dealer Bond Requirements
In Minnesota, individuals selling more than five motor vehicles per year must obtain a license as an auto dealer. The state requires a surety bond for various license types, including new and used vehicle dealers, wholesalers, brokers, lessors, auctions, and salvage pools.
The Minnesota Department of Public Safety, Driver and Vehicle Services acts as the obligee for these bonds. Dealers must maintain their surety bond in good standing to keep their license active. The bond serves as protection for consumers and the state against fraudulent or unethical practices by licensed dealers.
Bond Costs and Application Process
The cost of a Minnesota auto dealer bond varies based on the applicant's credit history and financial standing. Those with credit issues may face higher premiums. Single Source Surety offers competitive rates and assists applicants in obtaining the best possible terms for their bond.
After purchasing the bond from Single Source Insurance, dealers must file it along with the attached power of attorney to the Minnesota Department of Public Safety, Dealer and Vehicle Services. The company's experienced professionals guide applicants through the entire process, ensuring compliance with state regulations.
