Illinois Auto Dealer Bond Overview
Anyone who sells 5 or more vehicles per calendar year needs to obtain an Illinois dealer license, and the auto dealer bondis a mandatory requirement that needs to be submitted with the application.
Simply put, the auto dealer bond is required so that car buyers are protected when shopping for vehicles. If a dealer is using unethical or fraudulent business practices, a shopper can file a claim against their surety bond and seek reimbursement. If a court finds the claim valid, the dealer will be liable for sums not exceeding the total bond amount.
Here is the bond requirement in Illinois in a nutshell:
Bond Name: Illinois Designated Agent Bond
Bond Amount: $20,000 (to become $50,000 as of Jan. 1, 2018)
Obligee: Secretary of State
Vehicle Services Department
Dealer Licensing Section
501 S. Second St., Rm. 069
Springfield, IL 62756
Expiration Date: Dec. 31 of each year
If you’re ready to begin your online application, click on the Start Your Application button on your right. Have a look at the sections below for additional information about Illinois dealer bonds.
Illinois Auto Dealer Bond Cost
The total bond amount required from Illinois dealers is $20,000. This sum signifies the maximum penal sum that can be awarded to a successful claimant.
Surety bonds, however, are a bit like insurance in that they are paid for in annual premiums, which comprise a few percents of the full amount. If you have a good credit score (FICO of 650 and above), your premiums will vary between 1,5% and 3% of the bond amount.
Some other factors, such as industry experience and financial statements, can also be factored in, but an applicant’s personal credit score is generally considered the most important.
|Surety Bond Cost by Credit Score|
|Surety Bond Name||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Illinois Motor Vehicle Dealer Bond||$20,000||$200-$400||$300-$600||$400-$800||$600-$1,400|
For more information visit our How Much Does a Surety Bond Cost? page.
Bad Credit Dealer Bonds
Plenty of applicants are worried that their bad credit score will stand in the way of their dealer license, but this is rarely true. While some bonding companies refrain from offering bad credit auto dealer bonds, a lot of highly reputable underwriters do.
Bryant Surety Bonds has partnered with them and created an exclusive bad credit surety bonds program. With us, 99% of applicants can get bonded at rates varying between 4% and 7%.
Illinois Auto Dealer Bond Renewal
To be kept valid, you license needs to be renewed yearly, which means your auto dealer bond does, too. Renewal is simple and the price is similar to the initial one, unless there are changes in your credit score or financials.
Keep in mind that the dealer bond needs to be renewed by December 31 of each year.
Illinois Dealer License Requirements
There are some other important requirements that should be included in your application apart from the original bond form. These include:
- Insurance in the minimum amounts of: $100,000 for bodily injury, $300,000 for each accident and $50,000 for property damage
- Copy of zoning form
- Copy of franchise agreement (new-car dealers only)
- A completed training course
- A completed background check
The website of the Illinois Secretary of State contains a full list of licensing requirements, so you can be sure you’ve fulfilled them all before submitting your application.
Get Your Illinois Auto Dealer Bond Today!
Getting your auto dealer bond is incredibly easy thanks to our online application. After providing the necessary information (takes just a few minutes), you will receive your free quote instantly.
After you pay your premium, we do our best to get your bond form signed by the surety as soon as possible, normally within 1 or 2 business days.
Still got questions or need any help? Call us at (866)-450-3412 and we’ll be happy to help!