Maryland Auto Dealer Bond Overview
In order to get a Maryland car dealer license, individuals must post a Maryland auto dealer bond to the Department of Transportation (MDOT). This applies equally to new and used car dealers.
An auto dealer bond is a form of protection for the customers of an auto dealer as well as for the state and– in this case– the MDOT which issues Maryland car dealer licenses. If a claim is made against the bond, because a dealer has been found to be in breach of regulations or to have been dishonest with customers, the bond guarantees financial compensations to those who have suffered financial harm up the full penal sum.
In other words, this bond is an agreement between the Maryland auto dealer (the principal), the MDOT (the obligee), and the surety bond company which provides the financial coverage of the bond. It guarantees that auto dealers in Maryland will comply with regulations, and adhere to professional business practices.
Read the sections below for detailed information about how much your Maryland DMV bond could cost, and how you can get bonded.
Maryland Auto Dealer Bond Cost
The cost of your Maryland motor vehicle dealer bond is a fraction of the total amount of the bond. The required bond amount is based on the dealership’s volume of past sales, or on the projected volume of sales.
When setting a rate for your bond, sureties typically assess your financial status and stability. In doing so, they have a close look at some or all of the following indicators:
- Your personal credit score
- Your personal and business financial statements
- Your industry experience
- Your asset profile
- Others
Have a look at the table below to determine the amount of the bond you will need to post and the estimated cost of obtaining your cost, based on your credit score:
| Bond Cost by Credit Score and Number of Vehicles Sold per Year | |||||
|---|---|---|---|---|---|
| New Vehicle Dealer Bond | |||||
| Number of Vehicles Sold | Surety Bond Amount | Above 700 | Between 650-699 | Between 600-649 | Below 599 |
| 1-500 | $50,000 | $500-$1,000 | $750-$1,500 | $1,000-$2,000 | $1,500-$3,500 |
| 501-1,000 | $75,000 | $750-$1,500 | $1,125-$2,250 | $1,500-$3,000 | $2,250-$5,625 |
| 1,001-2,500 | $100,000 | $750-$1,500 | $1,000-$3,000 | $2,500-$5,000 | $5,000-$5,250 |
| Over 2,500 | $300,000 | $3,000-$6,000 | $4,500-$9,000 | $6,000-$12,000 | $9,000-$21,000 |
| Used Vehicle Dealer Bond | |||||
| Number of Vehicles Sold | Surety Bond Amount | Above 700 | Between 650-699 | Between 600-649 | Below 599 |
| 1-250 | $15,000 | $150-$300 | $225-$450 | $300-$600 | $450-$1,050 |
| 251-500 | $25,000 | $250-$500 | $375-$750 | $500-$1,000 | $750-$1,750 |
| 501-1,000 | $35,000 | $350-$700 | $525-$1,050 | $700-$1,400 | $1,050-$2,450 |
| 1,001-2,500 | $50,000 | $500-$1,000 | $750-$1,500 | $1,000-$2,000 | $1,500-$3,500 |
| Over 2,500 | $150,000 | $1,500-$3,000 | $2,250-$4,500 | $3,000-$6,000 | $4,500-$10,500 |
| Wholesale Dealer Bond | |||||
| Number of Vehicles Sold | Surety Bond Amount | Above 700 | Between 650-699 | Between 600-649 | Below 599 |
| 1-250 | $15,000 | $150-$300 | $225-$450 | $300-$600 | $450-$1,050 |
| 251-500 | $25,000 | $250-$500 | $375-$750 | $500-$1,000 | $750-$1,750 |
| 501-1,000 | $35,000 | $350-$700 | $525-$1,050 | $700-$1,400 | $1,050-$2,450 |
| 1,001-2,500 | $50,000 | $500-$1,000 | $750-$1,500 | $1,000-$2,000 | $1,500-$3,500 |
| Over 2,500 | $150,000 | $1,500-$3,000 | $2,250-$4,500 | $3,000-$6,000 | $4,500-$10,500 |
Standard Markets
Of the above factors that sureties take into account, personal credit score is the most influential one. Sureties rely on credit score so heavily because it has proven to be an accurate tool for predicting the risk associated with bonding a particular applicant.
Applicants who have a high credit score are offered a lower rate on their bond, one between 1,5%-3% of the total bond amount. Applicants with a relatively high– yet not exceptional– credit score can expect a rate between 3%-7%.
Your bond rate is also determined by your choice of surety bond agency. Not all surety bond agencies have access to the same markets, or the same rates. When picking an agency, you need one that can offer you the lowest and most competitive rates.
Bryant Surety Bonds prides itself with working only with A-rated and T-listed surety bond companies. These companies are among the best in the whole country, with an exceptional record, and through them we are able to offer you the lowest rates on your Maryland auto dealer bond.
Use our surety bond calculator on the right to get an estimate of the cost of your dealer bond. If you wish to get a 100% precise and free quote on your bond, simply apply online here and submit your surety bond application. You will receive your Maryland auto dealer bond quote within a very short amount of time.
Call us anytime at 866.450.3412 if you have any queries, doubts or difficulties. Bryant Surety Bonds’ team of surety experts will be happy to take your call, and provide you with more information and assistance.
To learn more about the different factors that influence bond cost, visit our 'Surety Bond Cost' page for detailed information.
Bad Credit Dealer Bonds
Those with an even lower credit score– even a so-called bad credit score– are also able to get bonded with us. Thanks to our Bad Credit Surety Bond Program, applicants who are typically turned down elsewhere because of their credit score can still obtain a Maryland motor vehicle dealer bond, at a rate between 3%-7% of the bond amount.
This, too, is made possible thanks to our great surety partners. They can supply us with a great variety of markets that are suitable for all credit types, without compromising on quality.
Maryland Auto Dealer License Application and Renewal
Maryland car dealer licenses are issued for 2 years at a time. When applying for a license, you will be asked to submit a license application form along with a number of documents that are required by the MDOT. Your application form, along with all additional documents, is to be submitted at the following address:
Maryland Motor Vehicle Administration
6601 Ritchie Highway N.E.,
Glen Burnie, Maryland, 21062
You will also be asked to submit the following documents when applying for your Maryland auto dealer license:
- An application for a vehicle dealer license
- A zoning approval form
- A criminal background check
- A copy of your trader’s license
- An Electronic Registration and Titling (ERT) Provider contract
- A Maryland auto dealer bond (amount determined by amount of sold vehicles)
- Use and occupancy permit if your office is a trailer
- A repair facility contract (if you do not have a repair facility on your premises)
There are a number of additional requirements, so check the MDOT’s website for further information and the Business Licensing Packet for car dealers. Remember, when applying, you will have to pay a $500 2-year licensing (or renewal) fee.
Download our FREE ebook guide to learn everything about getting licensed as a dealer in Maryland!
Get Your Maryland Auto Dealer Bond Today
Apply online here by submitting a surety bond form! Applying is very simple and takes only a couple of minutes. Processing times for auto dealer bonds are short and your free quote will arrive shortly.
Call us at 866.450.3412 to speak to one of our experts and find out more about auto dealer bonds. Whether you’re having trouble with your application, or would simply like to get additional information, we will be happy to help.
