Virginia motor vehicle dealers need to be licensed and bonded, as do dealers in most states. Keep reading to learn how the process works, or apply to get bonded today.
Virginia Auto Dealer License Requirements
To get a Virginia motor vehicle dealers license, you must apply through the Commonwealth’s Motor Vehicle Dealer Board (MVDB). On the license application, dealers specify whether they will be a franchised or independent dealer. Franchised dealers have agreements with a vehicle manufacturer to sell their vehicles—whether new or used—while independent dealers sell only used cars.
Information Needed
Some of the information dealers need to provide to the MVDB includes:
- Name of business and trade name, if applicable
- $350 Motor Vehicle Transaction Recovery Fund�(MVTRF) fee
- Name of the dealer-operator, the person in charge of day-to-day operations
- Type of business ownership (LLC, corporation, etc.)
- Names and titles of all business owners, partners, etc.
- Business hours
License Prerequisites
The MVTRF Fund is used to reimburse consumers who have suffered damages because of a dealer’s illegal practices.�There are some other prerequisites for a Virginia auto dealer license:
- Must have exclusive dealership space of at least 250 square feet
- Must maintain dealer records as required by��46.2-1529 of the Code of Virginia
- Must display business hours (at least 20 hours per week, 10 of which must be between 9 a.m. and 5 p.m. Monday through Friday)
- Office must have a desk, chair, filing space, working business telephone listed to the dealership, internet connection, and email address
- Space to display at least ten vehicles
- Become a licensed salesperson (licensed dealer and employees that are salespeople)
- Get a $50,000 surety bond�
- Training courses as required
All license requirements can be found in the MVDB’s New Dealer Packet. You can find all the forms needed for application or renewal on the MVDB’s website.
VA Dealer Bonds
The standard surety bond required of Virginia motor vehicle dealers is a $50,000 bond. Dealers in the Commonwealth need to renew their surety bond for the first three years of licensure, plus the $350 MVTRF Fund fee. After three years, if no claim has been made against the dealer’s bond or against the Fund in their name, the dealer no longer needs to renew the surety bond. In addition, the annual $350 Fund fee drops to $100.
Motor vehicle dealers can opt not to participate in the Fund at the time of license renewal. In this case, they need to post a $100,000 surety bond. Dealers only have this option as long as they have not been the subject of a bond or Fund claim for at least three years.
The bond serves as dealers’ guarantee that they’ll adhere to the provisions of the Code of Virginia pertaining to their license. If they do not, and a consumer suffers losses as a result, the bond provides a means of reimbursement.�Individuals can receive no more than $25,000 per claim on a $50,000 dealer surety bond, and no more than $20,000 per claim on a $100,000 dealer bond.
Ready to get bonded as a Virginia auto dealer? Get in touch with Single Source Insurance today!