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A Mississippi auto dealer bond is a used vehicle dealer�s guarantee to comply with all state laws and regulations governing the auto dealing industry. This includes remitting required taxes and fees to the Mississippi Department of Revenue (DOR). Claims may be filed against a dealer�s bond by consumers seeking compensation for a financial loss caused by the dealer�s unlawful or unethical business practices or by DOR to recover unpaid taxes and fees.
The Mississippi Department of Revenue requires dealers who sell used vehicles to be licensed as a used motor vehicle dealer, which is defined as �any business entity that sells or exchanges 24 or more used motor vehicles per year.� Purchasing a $15,000 Mississippi auto dealer bond is a mandatory step in the licensing process.
Bear in mind that all Mississippi auto dealer bonds must be renewed before they expire on December 31, regardless of the month in which they were purchased. There must always be an active auto dealer bond in force to avoid license suspension or revocation.
The three parties to a Mississippi auto dealer bond are:�?
The surety bond agreement establishes a legally binding contract between these parties. That contract indemnifies the obligee and the surety against any liability for claims and legally obligates the principal to pay all valid claims.
Common reasons for claims filed by consumers include:
When a claim is filed, the surety will conduct an investigation to ensure that it�s legitimate and should be paid. If the principal doesn�t pay a valid claim promptly, the surety will, essentially extending credit that the principal must, by law, repay.
Surety bond companies set the premium rate for a Mississippi auto dealer bond on a case-by-case basis, taking into account both the principal�s creditworthiness and the likelihood of claims. Creditworthiness is determined based largely on the principal�s personal credit score, along with personal and business financials. The principal�s industry experience and prior claims history are good predictors of the likelihood of claims being filed against the bond.
A well-qualified principal may pay a premium rate as low as 1% of the $15,000 bond amount, for an annual premium of $150.
Request a convenient online quote today, or call to speak with one of our experienced professionals about the Mississippi auto dealer bond you need.
