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A New York Motor Vehicle Dealer bond is one of the requirements for becoming licensed to sell new or used motor vehicles in the state of New York. It serves as a license and permit bond guaranteeing that the dealer will do business in compliance with all New York DMV rules and regulations. The bond protects the public against financial loss resulting from any unlawful or unethical action of a dealer licensed in the state of New York.
Bond Penalty Amount:�$20,000 (less than 50 vehicles sold) / $50,000 (new cars only) / $100,000 (50+ vehicles sold)
Bond Term:�1 year
Who Needs Them?
All auto dealers operating in the state must have a continuous New York auto dealer bond in place to maintain their license. includes used car dealerships as well as franchised auto dealers.�
NOTE:�Dealers who only sell trailers, motorcycles, boats, snowmobiles, vehicles over 10,000 lbs, and ATVs are not required to provide a surety bond. The current Bill (S5485B) states that if you are a currently licensed dealer, when you renew or alter your bond, you will be required to increase the penalty to $100,000.
How Do They Work?
The parties to the bond agreement are the New York Department of Motor Vehicles (the obligee requiring the bond), the motor vehicle dealer (the principal purchasing the bond), and the company issuing the bond and backing it financially (the surety).
If the dealer commits an infraction of the bond�s terms and conditions, a party who experiences a financial loss as a result may file a claim against the bond. The surety will determine whether the claim is valid before paying it. The bond contract includes an indemnification clause that requires the dealer to reimburse the surety for the amount paid to the claimant. In essence, the surety only advances the claim amount to expedite the payment process and must be repaid.
What Do They Cost?
The required bond amount for a given used car dealer depends on how many vehicles the dealer sold in the previous year. These amounts are as follows:
$20,000 for dealers that sold 50 or fewer vehicles
$100,000 for dealers who sold more than 50 vehicles
$50,000 for dealers of only new cars
The dealer will pay a small percentage of that amount as the annual premium for the bond. The factors that determine the premium include the dealer’s credit score and financial situation as well as their industry experience and reputation. Dealers with good credit typically pay from 1% to 3% of the required bond amount. Those with poor credit will likely pay a higher premium.
After Purchasing The Bond
After you�receive your surety bond and power of attorney in the mail, you will need to sign it and submit it to the State of New York, Department of Motor Vehicles:
NYS DMV Bureau of Consumer & Facility Services
Application Unit
P.O. Box 2700
Albany, NY��12220-0700
Apply Now
Our experienced surety bond professionals will gladly answer any questions you may have about New York Motor Vehicle Dealer bonds and help you get the bond you need.
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Frequently Asked Questions
How do I apply for a New York motor vehicle dealer bond?
To apply for a New York motor vehicle dealer bond, you need to determine the required bond amount based on the number of vehicles sold, complete the application, and submit the signed bond and power of attorney to the New York Department of Motor Vehicles.
What is the purpose of a dealer surety bond in NYS?
The purpose of a dealer surety bond in New York State is to provide financial protection and compensation for any losses or damages incurred by consumers due to the dealer's failure to comply with applicable laws and regulations.
What is the bond term for a New York motor vehicle dealer?
The bond term for a New York motor vehicle dealer is 1 year.
What documents are required for a New York motor vehicle dealer bond?
The documents required for a New York motor vehicle dealer bond include the signed surety bond and power of attorney, which must be submitted to the New York State Department of Motor Vehicles.
What is the purpose of a New York motor vehicle dealer bond?
The purpose of a New York motor vehicle dealer bond is to provide financial protection to the state and the public against any violations or infractions committed by the motor vehicle dealer.
How do I get a dealer surety bond in New York State?
To obtain a dealer surety bond in New York State, you need to purchase a bond with a penalty amount of $20,000, $50,000, or $100,000, depending on the number of vehicles sold. The bond must then be submitted to the New York Department of Motor Vehicles.
What is the process for applying for an NYS dealer bond?
The process for applying for an NYS dealer bond involves submitting the signed surety bond and power of attorney to the New York State Department of Motor Vehicles after purchasing the required bond.
Who needs to obtain an NYS dealer surety bond?
The New York Department of Motor Vehicles requires used car dealerships and franchised auto dealers to obtain a surety bond. Dealers who only sell trailers, motorcycles, boats, snowmobiles, vehicles over 10,000 lbs, and ATVs are not required to provide a surety bond.
What is the bond amount for NYS car dealers?
The bond amount for NYS car dealers is $20,000 for dealers that sold 50 or fewer vehicles, $100,000 for dealers who sold more than 50 vehicles, and $50,000 for dealers of only new cars.
What are the auto dealer bond requirements in New York?
The auto dealer bond requirements in New York state that used car dealerships, franchised auto dealers, and dealers selling more than 50 vehicles must obtain a surety bond of $20,000, $50,000, or $100,000, respectively, to be licensed.
How much does a New York motor vehicle dealer bond cost?
The cost of a New York motor vehicle dealer bond depends on the bond amount, which ranges from $20,000 to $100,000 based on the number of vehicles sold. The dealer typically pays a small percentage of the bond amount as the annual premium.
How long does it take to get a New York motor vehicle dealer bond?
The process to obtain a New York motor vehicle dealer bond typically takes 1-2 business days once the application and required documents are submitted.
What are the requirements for obtaining an NYS dealer bond?
The requirements for obtaining an NYS dealer bond include providing a surety bond in the amount of $20,000 (for dealers selling 50 or fewer vehicles), $50,000 (for new car dealers only), or $100,000 (for dealers selling more than 50 vehicles).
Who requires a motor vehicle dealer bond in New York?
A motor vehicle dealer bond in New York is required for used car dealerships, franchised auto dealers, and any dealer who sells more than 50 vehicles per year.
What types of dealer bonds exist in New York?
The types of dealer bonds that exist in New York include the New York Motor Vehicle Dealer Bond, which is required for used car dealerships as well as franchised auto dealers. The bond amount can range from $20,000 to $100,000 depending on the number of vehicles sold.
How do I renew my dealer surety bond?
To renew your dealer surety bond, you need to submit the renewal application to the New York Department of Motor Vehicles along with the required bond amount and premium payment before the expiration of your current bond.
Are dealer bonds transferable in New York?
Dealer bonds in New York are not transferable. The bond is specific to the licensed motor vehicle dealer and cannot be transferred to a new owner or location.
What factors influence dealer bond premiums?
The factors that influence dealer bond premiums include the number of vehicles sold, whether the dealer sells new or used cars, and the dealer's claims history.
Can I serve as my own bond agent?
Serving as your own bond agent is generally not allowed. Surety bonds typically require an independent third-party surety company to issue the bond on your behalf.
What is the validity period of NYS dealer bonds?
The validity period of NYS dealer bonds is 1 year.
What penalties exist for bond violations?
The penalties for bond violations vary based on the number of vehicles sold, with penalties ranging from $20,000 for dealers who sold 50 or fewer vehicles to $100,000 for dealers who sold more than 50 vehicles.
How can I check my bond status?
To check your bond status, you can contact the surety company that issued your bond and request an update on the status of your bond.
What happens if I don’t renew my bond?
If you do not renew your bond, you will no longer be authorized to operate as a motor vehicle dealer in New York, and you may face penalties or legal action from the Department of Motor Vehicles.
Are there specific requirements for used car dealers?
Yes, used car dealers in New York are required to obtain a $20,000 motor vehicle dealer bond if they sell 50 or fewer vehicles, or a $100,000 bond if they sell more than 50 vehicles.
How can I appeal a denied bond application?
If your bond application has been denied, you can appeal the decision by submitting additional documentation or information that addresses the reasons for the denial to the surety company or bond issuer.
What is the role of a bond underwriter?
The role of a bond underwriter is to assess the creditworthiness of the bond issuer, determine the appropriate bond pricing, and facilitate the sale of the bonds to investors.
Can my bond be canceled without notice?
Your bond cannot be canceled without notice. Surety bond providers are required to provide written notice before canceling your bond, typically 30 to 60 days in advance, to allow you to secure a replacement bond.
What documentation is required for bond claims?
The documentation required for bond claims typically includes the bond agreement, proof of the financial loss, and any supporting documents that demonstrate the infraction of the bond's terms and conditions.
What happens if a claim is made against my bond?
If a claim is made against your bond, the surety company that issued the bond may be required to pay the claim, and you as the principal may be liable to repay the surety for the amount paid.
How do I find a reliable bond provider?
To find a reliable bond provider, research companies that specialize in surety bonds, compare their offerings and customer reviews, and work with an experienced agent who can guide you through the process.
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Surety Bond Requirements
The New York Motor Vehicle Dealer Bond is a surety bond required by the New York Department of Motor Vehicles. It serves as a guarantee that the dealer will comply with all relevant laws and regulations governing motor vehicle sales in the state.
The bond amount varies depending on the number of vehicles sold by the dealer, ranging from $20,000 for those selling 50 or fewer vehicles to $100,000 for those selling more than 50 vehicles. Dealers selling only new cars are required to have a $50,000 bond.
Purchasing the Bond
After obtaining the surety bond, the dealer must sign it and submit it to the New York Department of Motor Vehicles. This ensures that the bond is in place and the dealer is authorized to operate in the state.
The annual premium for the bond is a small percentage of the total bond amount, and it is paid to the surety company that issues the bond. This premium is typically tax-deductible as a business expense.
