Florida Auto Dealer Bond Overview
- Surety Bond Name: Motor Vehicle Dealer Bond, MVD Bond, DMV Surety Bond
- Obligee: Division of Motorist Services at the Florida Department of Highway Safety and Motor Vehicles
- Required Expiration Date of Bond: 30 April
- Surety Bond: It is not continuous, so you need to renew it every year or every two years
As every motor vehicle dealer bond, the Florida auto dealer bond is a strict prerequisite to obtaining an auto dealer license in Florida. Here’s how the bond works. Auto dealer bonds are like an extended line of credit for your business. Their function is to guarantee that as an auto dealer you will comply with state regulations pertaining to your dealer license, in the sale or exchange of motor vehicles. They do so by protecting your customers in case that they should have a reason to file a legitimate claim against the bond.
The three sides that partake in the surety bond agreement are: the principal (your car dealership), the obligee (the State of Florida) and the surety bond company that underwrites your auto dealer bond.
The Florida auto dealer bond ensures that you as an auto dealer will compensate any person who has suffered loss or damages as a result of your failure to comply with the conditions and regulations of your license. In other words, the auto dealer bond protects the customer from suffering any permanent losses as a result of contractual violations.
When a customer raises a legitimate claim against your MVD bond, the surety compensates them for the harm they have sustained, up to the penal sum of the bond. After that, you have to reimburse the surety for their backing. This is part of the indemnity agreement, which you sign when you obtaining the bond. It is therefore best to avoid claims altogether because they can harm your business’s financial status and reputation.
Florida Auto Dealer Bond Cost
When you submit your application for obtaining a Florida auto dealer license, you will also be asked to post a $25,000 Florida auto dealer bond.
But what you need to pay to obtain the bond is only a fraction of the total bond amount. This fraction is called a premium and is usually between 1% and 4% of the total bond amount. In other words, to obtain a bond at standard market rates, you will have to pay between $250 and $1000.
The exact amount of your bond premium is determined on the basis of your credit score, as well as your business’s financial health, your personal industry experience and other factors. The better your credit score and the more stable your business - the lower your bond premium will be. You can further lower your premium by improving your credit score over time.
Another factor that significantly influences your Florida dealer bond premium is the surety bond company you work with. Bryant Surety Bonds works with a large network of highly reliable A-rated and T-listed surety companies. This gives us access to exclusive rates, which we can offer you.
The exact amount of your premium is determined when you apply for your auto dealer bond and receive a quote. Meanwhile, you can use our bond cost calculator in the right sidebar to get a ballpark estimate of what your quote might look like. For more information on how premiums are calculated, make sure to visit our surety bond cost page.
Bad Credit Program
It is possible to get bonded even if you have bad credit, bankruptcies or other financial difficulties. Our bad credit surety bond program is tailored to accommodate businesses with less-than-perfect credit, who may otherwise have their surety bond applications rejected elsewhere.
To obtain a Florida auto dealer bond as a high-risk applicant, you may need to pay a slightly higher premium in order to compensate for the greater risk involved. Premiums for bad credit applicants usually range between 5% and 15% of the total bond amount. Despite your bad credit, you are still sure to receive the best bond rate.
Bryant Surety Bonds works for auto dealers and is interested in helping them improve their financial status over time and offer them even better premiums.
Auto Dealer Bond Renewal
Motor vehicle dealer bonds are usually renewed every year. Alternatively, it is also possible to renew them every two years if your license runs for two years, instead of one. The renewal deadline for both licenses and bonds is April 30th.
Keep in mind that your bond premium will vary between one renewal and the next, based on the financial status of your business. If you improve your financial standing and mostly your credit score, you are likely to receive lower rates every time you renew your bond.
And if you get your Florida dealer bond with Bryant Surety Bonds we will make sure to keep track of your bond and remind you when it’s time to renew it!
Get Your Florida Auto Dealer Bond Today
Obtaining your Florida dealer bond is very straightforward. All you need to do is аpply online. You will then receive a free bond quote within minutes and can proceed with presenting the documentation needed to underwrite your bond.
If you have any unanswered questions, you can always call us at (866)-450-3412. Our surety bond experts will gladly respond to all your questions and guide you through the process.
How to Get an Auto Dealer License in Florida
When you apply for a Florida auto dealer license, you will need to specify which one you need, as they each correspond to different services.
As an Independent Dealer, you can only deal used vehicles for retail and wholesale. As a Franchise Dealer you can deal used and new motor vehicles in agreement with a manufacturer. Wholesale Dealers can buy, sell and deal only at wholesale prices with other dealers. If you get an Auctions License, you get to sell motor vehicles from other dealers through bidding and you cannot engage in retail sales.
After you have chosen which license fits your car dealership, you need to present the Florida Department of Highway Safety and Motor Vehicles with the required paperwork.
Learn more about getting licensed, how to start your auto dealership and even more by downloading our FREE ebook guide!