Blog Posts Categorized: Auto Dealer Bonds - Page 3

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Louisiana auto dealers need a license and surety bond if they sell new or used vehicles in the state. Two different organizations issue dealer licenses, and surety bond amounts vary. Keep reading to find out how to get licensed and bonded, or use our convenient online form to apply for a dealer bond today.

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Used Auto Dealer License Requirements

Louisiana auto dealers selling used cars are licensed by the state Used Motor Vehicle Commission. If you sell five or more cars in a calendar year, you’ll need this license. On the application, dealers must specify which types of used vehicles they will sell (cars, boats, trailers, motorcycles, etc.). Here are some of the requirements used car dealers must meet:

• Established place of business (leased or owned)
• At least one salesperson
• Attend an Educational Training Seminar
• Obtain a $50,000 surety bond (as of August 2016)
• Obtain garage liability insurance
• Zoning verification from local zoning authority
• Permanent business sign
• Business phone number

Once an application is under review, the business location will be inspected. When they are issued, licenses are valid from the date issued or January 1, whichever date is later, and expire December 31. The license costs $400 for the two-year term. Give the licensing requirements a thorough read before applying.

The surety bond required of used auto dealers increased in 2016 to $50,000, up from either $20,000 or $35,000, depending on how many cars the dealer sold.

New Auto Dealer License Requirements

Louisiana auto dealers selling new cars in the state go through a similar licensing process with the Motor Vehicle Commission. Their places of business must also be correctly zoned, and each business location needs a license. They also need a surety bond in a lessor amount, $20,000. Like the used car dealer bond, this bond protects consumers if the dealer breaks the law and causes them financial damage.

Licensing periods are a little more complicated for new car dealersďż˝their license is valid for two years, and the period depends on which Commission district you are in (there are eight). Find which counties are in which district here, and then find your licensing period here in ďż˝32.1254. If you’re interested in applying to be an auto dealer in Louisiana, contact the Commission at (504) 838-5207 for forms and more information—the forms are not available online.

Ready to get a Louisiana dealer license? Get started by getting a quote for your surety bond today!ďż˝

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In Nebraska, motor vehicle dealers need to get a license and surety bond. Keep reading to see what information the state needs, or apply online today to get the bond you need.

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Nebraska Dealer License Requirements

Licensing and bonding for car dealers are standard procedure in most states, including Nebraska. Nebraska motor vehicle dealers are issued licenses by the Motor Vehicle Industry Licensing Board. The term “motor vehicle dealer” also includes motorcycles and trailers, meaning licensed dealers can also sell those vehicles.

The Board has created thorough instructions for motor vehicle dealer applicants, so review them completely before submitting an application. Listed below is some of the information the Board will need:

• Dealership’s DBA, address, and phone number
• Zoning permit or letter from zoning authority
• Photos of business and signage
• Posted business hours of at least 40 hours per week
• Proof of workers compensation insurance or coverage waiver
• Franchise agreement, if applicable
• $50,000 surety bond

Nebraska motor vehicle dealers must have service facilities at the business location, or they need a Service Agreement with a repair shop. After the application is submitted, a field investigator will inspect the dealership and approve or deny the application. The dealership must have space to display at least ten of the vehicles it will be selling. If the applicant doesn’t own the location, they must provide a lease agreement. Licenses expire each year on December 31.

Dealer Bond Requirements

Auto dealers need a $50,000 surety bond in Nebraska—a standard amount for dealers across the country. The bond means that dealers are guaranteeing the state and their customers that they will adhere to the terms of their license. And when it comes to selling cars, that means obeying all the laws pertaining to their business.

Dealers have obligations to their customersďż˝that they won’t misrepresent the vehicle they’re selling, that they will not misuse customer funds, and that they will provide titles for the vehicles they sell. (And those are only a few of their responsibilities!) Should they violate the terms of their license and the surety bond, causing financial damage, claims can be filed against the bond. The dealer must reimburse the surety, so it’s their best bet to avoid claims on the bond.

How Much Does The Bond Cost?

Nebraska motor vehicle dealers’ bond provides $50,000 of coverage, and it’s underwritten, meaning its premium varies depending on a review of the bondholder’s credit. But don’t worryďż˝with a strong financial history, applicants pay as little as 1%, or $500, for their bond.

Even if your credit isn’t at its highest, give Single Source Insurance a call and we’ll help you get bonded in Nebraska!

Becoming a Missouri auto dealer involves getting licensed and bonded, like it does in many states. Learn more about the process, and apply online for the bond you need today.

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Understanding Different Types of Auto Dealer Bonds

If you want to be a Missouri auto dealer, you’ll submit an application to the Motor Vehicle Bureau, a division of the Department of Revenue. If you sell six or more new or used vehicles in a year, you need to get this license. Here’s some of the other information the Bureau will need:

• Business name, DBA, and address
• Type of business (LLC, corporation, etc.)
• Contact person
• Requested dealer plate quantity
• Franchise agreements (if applicable)
• Owner information
• $25,000 surety bond
• Garage liability policy (if applicable)
• Photos of building, lot, and sign

If you will be a used car dealer, you will also need a Certificate of Completion of the Dealer Educational Seminar. You’ll also need to pay licensing fees, which are prorated depending on when you apply, since Missouri auto dealer licenses expire annually on December 31. The fee starts at $150 for January applicants, decreasing monthly to $12.50 for December applicants. You’ll also need to pay $50 for your first dealer license plate, plus $10.50 for each additional plate. Those fees are also prorated if you are applying later than January.

Missouri Dealer Bond Requirements

The surety bond form Missouri auto dealer applicants need to use is available on page 54 of the Dealer Operating Manual. Auto dealers have a responsibility to customers and the state to conduct business fairly, in accordance with the law. That’s where the $25,000 surety bond comes in: when you sign the bond, it’s your promise that you will follow state and federal laws and abide by the terms of your license. If you don’t, and cause financial damage to a consumer, they can file a claim against your surety bond. If the claim is proven, the surety will pay the claim—but you’ll have to reimburse the surety for that claim amount. That means if a $10,000 claim is paid, you owe that amount to the surety company.

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How Much Does The Bond Cost?

The bond amount required is $25,000, and it’s subject to underwriting. That means your premium depends on a review of your credit history by the underwriter. Applicants typically pay 1-5% of the bond’s total amount, which means you might pay $250-$1,250ďż˝or more, or less. The only way to know is to get a free quote from Single Source Insuranceďż˝get in touch today!

Interested in getting a Tennessee motor vehicle dealer license? If you’re new to business licensing, here’s a quick rundown of how the process works. Learn more below, and apply online for the bond you need today.

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Tennessee Dealer License Requirements

In order to be eligible for the auto dealer license, applicants in Tennessee need to be prepared to begin doing business. They are licensed through the Tennessee Motor Vehicle Commission, and that agency has established a checklist of materials applicants need and criteria they must meet to get a license.

Motor vehicle dealer applicants must establish a permanent place of business that is at least 288 square feet with a restroom. The dealership’s lot must accommodate fifteen vehicles for display and have at least three customer parking spaces. The place of business can’t be at a private residence, and it must not share its lot with another business. Dealer licensees can operate one other business out of the same location, as long as the dealership remains the primary business.ďż˝Applicants also need a letter stating the business’s compliance with local zoning laws.

If the dealership will not have a repair facility on-site, applicants need a Service Agreement with a nearby auto repair shop. The dealership’s signs must be permanent, visible from the road, and display its full name in eight-inch letters. Applicants need to include photos of the entire business with the application.

Dealer Bond Requirements

Tennessee motor vehicle dealer applicants need a $50,000, two-year surety bond, a business tax license, and a financial statement showing a net worth of at least $10,000. Proof of liability and garage liability insurance is also a requirement. Any salespersons employed by the business need to apply through the state’s online portal.

If the dealership is a franchise, applicants pay a licensing fee of $400 per line-make they will sell; used auto dealer applicants pay $400.

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What Does This Bond Do?

The Tennessee motor vehicle dealer license bond is a dealer’s promise that they will adhere to all state and federal laws regarding their business. That means they won’t misrepresent the vehicles they’re selling or commit any sort of fraud that would cost their customers money dishonestly. But, if a customer does suffer financial damages as a result of the dealer’s unlawful business practices, the $50,000 surety bond protects them and the state from financial liability. The surety company pays out on any proven claims, but the dealer must reimburse the surety for that claim amount.

This bond must have a two-year term. Dealers can’t do business without this bond! Ready to get bonded as a Tennessee auto dealer? Single Source Insurance is ready to help!ďż˝

New car dealers (and used branches of new car dealerships) in Arkansas are licensed differently than used car dealers. In December, the Single Source Insurance blog went over how to get a used auto dealer license in the state; keep reading to learn about new car dealer licensing.

Getting licensed as an auto dealer

The Arkansas Motor Vehicle Commission issues new car dealers’ licenses, and requires them to submit an application plus a $100 licensing fee. Here’s some of the information applicants will need to provide:

• Indicate whether business location is leased or owned
• Description of facilities, including building, showroom, and lot square footage and dimensions
• Business information including DBA, mailing address, contact person, and email
• Makes of all vehicles that will be sold
• $50,000 surety bond
• Proof of adequate liability coverage
• Pictures of showroom, lot, building, sign, and all departments
• Applications for any salespersons plus $15 fee per application
• Contact information for several dealership employees, including a renewal contact and the general manager

The Commission has created a dealer procedure packet that all new car dealers should read thoroughly before submitting their application. Note that new dealer applications need to be accompanied by a letter from the manufacturer stating their intent to establish the franchise.

Licenses expire on December 31 and need to be renewed annually. The license renewal application requires a $100 fee, or $25 for a new dealer’s used branch. The same rules apply to any salesperson licenses, and their renewal fee is $15.

New car dealer surety bonds

One goal of the Motor Vehicle Commission is to protect consumers from unethical and unfair business practices, and a surety bond is one of the ways they do that. When new car dealers purchase and sign the surety bond (found on page six of the application), they are agreeing to follow the state’s laws for their license. Section 23-112-308 of Subchapter 3 the Commission’s Laws details violations that can result in license suspension, revocation, and in some cases, civil or criminal penalties.

Violations like those could also result in claims being made against the dealer’s surety bond. Should a claim be proven, the surety pays the claim up to the bond’s full amount. However, the new car dealer must reimburse the surety bond for that claim. Since new car dealers no doubt want to avoid paying out expensive claims, not to mention hang onto their business license, the bond is a deterrent to shady business practices.

Ready to get bonded as an Arkansas new car dealer? Give Single Source Insurance a call today for a free quote!ďż˝

Alabama motor vehicle dealers need a license and a surety bond to do business in the state. Here’s a quick how-to for licensing and bonding. If you’re ready to get bonded, you can apply online with Single Source Insurance.

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Alabama Car Dealer License Requirements

An Alabama dealers license is issued by the state’s Department of Revenue. To apply, would-be dealers use the Motor Vehicle Title Registration & Insurance Portal (MVTRIP) and submit their information online. New, used, and wholesale dealers all apply through MVTRIP and specify which type of license they need on the application. Some of the information dealer applicants need to provide includes:

• Business’s name and any trade names or DBAs
• Business mailing and physical address(es)
• Type of organization (corporation, LLC, etc.)
• Federal Employer Identification Number (FEIN)
• Sales state tax number (new and used dealers)
• Number of vehicles sold in the previous calendar year
• Personal information and copies of drivers’ licenses for all owners, partners, etc.
• $25 application fee + $5 per additional location
• $25,000 surety bond
• Proof of blanket motor vehicle liability insurance
• Proof of residence in the state of Alabama

Dealers also need to include pictures of all business locations and their signs with the application. The Department takes 7-14 business days to process applications, and if yours is approved, you will receive directions for printing out the license.

After getting a license, dealers can obtain dealer plates from a county licensing office. New auto dealers can get 25 plates, while used dealers can get 10, and any dealer can qualify for 25 additional plates if they complete 1,500 or more title transfers or applications for transfers in the previous licensing year.

Auto Dealer Sign Requirements

Alabama isn’t the only state with strict guidelines for motor vehicle dealer signs. According to dealer licensing laws, here’s the criteria for the signs:

• Must specify new or used motor vehicle dealer
• Must use business’s name as printed on the license
• Sign must be visible and legible from the closest street or 50 yards, whichever is a greater distance
• Must be displayed at the registered business address

Get A Dealer Bond

Surety bonds are required of Alabama motor vehicle dealers as a reassurance to the state and to consumers that the dealer is licensed and conducting business according to the law. The dealer agrees to honor any sales contracts made and keep their license current, in addition to the other provisions of the Code of Alabama 1975 Chapter 12, Article 5. You can access most forms, including the surety bond form, on the Department’s website.

It’s easy to get thisďż˝$25,000 bondďż˝get in touch with Single Source Insurance for a free quote today!ďż˝

Alabama dismantlers and parts recyclers are required by the state to get a license and surety bond. Keep reading to learn how the process works.

How to get an auto dismantler and parts recycler license

Auto dismantlers and parts recyclers are any entity (individual or business) that possesses 10 or more inoperable vehicles for more than 30 days. The definition does not include businesses holding vehicles that are waiting on repairs, or licensed junk dealers holding the vehicles for scrap metal. It also excludes anyone holding or repairing vehicles for their own personal use.

Prior to September 1, 2017, auto dismantlers and parts recyclers were licensed by the Business & License Tax Division of the Alabama Department of Revenue. Those licenses are now issued by the Department’s Motor Vehicle Division. Applicants apply through the Motor Vehicle Regulatory License Portal, and this is some of the information they need to provide:

• Applicant’s name and address of business
• Type of business organization
• Sales tax number
• NMVTIS number
• $225 fee
• $25,000 surety bond

Licenses expire each year on October 1, and licensees have 30 days to renew without penalty. After that, a 15% penalty and interest are charged. Dismantlers and parts recyclers also need to keep records of all transactions for five years afterward. Records need to record the vehicle’s make, model, body style, year, and VIN, as well as the name and address of the buyer.

Auto dismantlers and parts recyclers need to obtain Buyer’sďż˝Identification (BIN) cards so that licensees and their employees can make purchases at salvage pools or disposal sales. BIN cards are $10 each and licensees can purchase three per license year.

Dismantler and recycler surety bonds

Parts dismantlers’ and recyclers’ surety bonds are their promise to the state and to customers that they will follow the rules for their license laid out inAlabama Code��40-12-410 through��40-12-425, plus any other applicable laws. If the licensee does not follow those rules, and they cause financial harm to a customer, the customer can file a claim against the surety bond. The bond also removes liability from the state, placing it on the licensee. Applicants will gain access to the surety bond form after finishing their application in the online portal.

More questions about applying for this license? Contact the Alabama Motor Vehicle Division. Ready to get bonded? Get in touch with Single Source Insurance!

South Carolina auto dealers and wholesalers need to be licensed and get a $30,000 surety bond to do business. Keep reading to find out how to get licensed and bonded.

Licensing for South Carolina auto dealers

South Carolina auto dealers need a license if they sell or attempt to sell more five or more vehicles in a year. Vehicle wholesalers can only sell vehicles to dealers or other wholesalers, and they also need a license to sell more than five vehicle per year. Dealers and wholesalers are licensed by the South Carolina Department of Motor Vehicles (SCDMV) and need a license for each business location. Some of the information the Department needs from auto dealer applicants includes:

• Completed application
• Affidavit of Eligibility
• SLED criminal history reports for each owner with 10% or more stake in the business from the past 90 days
• $30,000 surety bond
• Diagram of entire business location, including office and display areas
• Copy of retail license from the Department of Revenue

Wholesale applicants do not need a retail license since they do not sell vehicles at retail.ďż˝This list isn’t exhaustive, so read the application and checklist carefully. Licenses cost $50, but the fee does not have to be submitted with the application. Mail completed applications to:

SCDMV
Dealer Licensing and Audit Unit
P.O. Box 1498
Blythewood, SC 29016-0023

If you apply for a dealer demonstration plate, you also need to submit proof of garage liability insurance. If any information that was submitted on your application changes, you need to notify the SCDMV and may need to submit a new application. South Carolina auto dealers’ licenses need to be renewed each year.

Motor vehicle wholesale auctions, motorcycle dealers and wholesalers, and travel trailer dealers use the same form to apply for licensure and submit much of the same information as auto dealer applicants. They also need to get a surety bond but with only $15,000 of coverage rather than $30,000.

Auto dealer and wholesaler surety bond

Auto dealers in most states need to get a surety bond to mitigate risk and protect consumers. The $30,000 requirement for South Carolina auto dealers and wholesalers provides that amount of coverage for their customers, should a customer suffer financial damage because of the licensee. If the consumer files a claim that is proven to be valid, the surety pays the claim on behalf of the auto dealer. The dealer must then reimburse the surety company.

Some dealers and wholesalers only need a $15,000 surety bond, but all applicants use the same bond form and are agreeing to the same terms. Those terms mainly entail following the South Carolina Code of Laws, Title 56.

Single Source Insurance can offer $30,000 South Carolina auto dealer bonds starting at just $188 for a one-year term. Get in touch with Single Source Insurance and get the bonding process started!

Arkansas requires auto dealers to get a license and a surety bond before they conduct business in the state. Learn more about the process below, and apply online for the bond you need today.

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Who Needs An Arkansas Dealer License?

Arkansas defines used auto dealers as those who buy and sell (or offer to sell or advertise for sale) five or more vehicles registered to them in a calendar year, or attempt to. They are licensed through the Arkansas State Police. Dealers license their primary business location and must submit separate applications for any additional locations.

Some of the information required of Arkansas used auto dealer license applicants includes:

• Business phone number in the dealership’s name appearing in local directories
• $250 fee for primary location
• $125 fee for secondary location(s)
• Business name(s), address, and email
• Business owner’s name, address, and social security number
• Business type (individual, partnership, etc.)
• Names and contact information of anyone with ownership interest
• Proof of a minimum of $75,000 of liability insurance coverage
• $25,000 surety bond
• Names and addresses of all dealership salespersons
• Photos of business’s sign (must be visible from the nearest road)

These licenses need to be renewed annually, and the state assesses late penalties if licenses aren’t renewed on time. Dealers whose licenses have been expired for more than 31 days but less than six months need to include a $35 late fee with their renewal. A license not renewed within six months of expiring is considered permanently expired, and licensees will need to restart the process. Renewal fees correspond with initial licensure fees.

Once completed, Arkansas auto dealers mail in their application and applicable fees:

Arkansas State Police Attn: Used Motor Vehicles #1 State Police Plaza Drive Little Rock, AR 72209

You can also deliver your application in person to State Police headquarters. Used auto dealers can also get a temporary business location permit that’s valid for ten days, which allows them to sell vehicles from a different location.

Surety Bond Requirements

The state of Arkansas requires a $25,000 surety bond of used auto dealers. However, dealers with multiple dealership locations can get a $100,000 surety bond to cover each location.

The Arkansas used auto dealer surety bond protects consumers in the state from unethical, illegal business practices on the part of the dealer. Should a dealer violatestate law and cause financial damage to a consumer, they can file a claim against the surety bond to seek reimbursement. If their claim is proven, the surety pays the claim up to the bond’s full amount. The bondholder (the used auto dealer) must then reimburse the surety—if a $5,000 claim was paid, the dealer must remit the full amount.

Violations of state law include misrepresenting a vehicle’s condition, falsifying or altering vehicle titles, and operating a dealership without a license. First violations are considered a Class A misdemeanor and second, third, and subsequent violations a Class D felony.ďż˝Three or more violations result in a three-year license suspension for each violation.

Ready to get licensed as an Arkansas used auto dealer? Get started with a surety bond from Single Source Insurance!

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