New Mexico Auto Dealer Bond Overview
Both new and used motor vehicle dealers in New Mexico must obtain an auto dealer bond when applying for a license at the New Mexico Motor Vehicle Division (DMV). The bond serves as a form of protection, and as a guarantee for both the state as well as for consumers.
As with every auto dealer bond, the New Mexico motor vehicle dealer bond works as protection against auto dealers who are dishonest, or do not comply with state regulations. If an auto dealer is found to be in breach of these, the New Mexico DMV, or the consumer, can file a claim against the bond and demand financial compensation from the surety backing the bond.
This means that auto dealer bonds function like agreements between three sides: the principal (the New Mexico auto dealer), the obligees (consumers and the New Mexico DMV) and the surety that provides the financial backing of the bond.
To find out more about New Mexico auto dealer bonds– how much they cost, how you can get bonded and about other licensing requirements– have a look at the sections below.
New Mexico Auto Dealer Bond Cost
A $50,000 auto dealer bond must be obtained by those New Mexico applicants who wish to become auto dealers or recyclers.
How much your New Mexico DMV bond will cost depends on a few factors. The cost is based on the total amount of the bond, $50,000, and is a percentage thereof.
When setting the rate to offer you for your bond, sureties typically consider an applicant’s financial standing and business history. They do so by checking a number of the following indicators:
- Applicant credit score
- Applicant personal financial statements
- Applicant business financial statements
- Applicant industry experience
Take a look at this table to see an estimate of surety bond cost by credit score:
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|
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Bond Cost by Credit Score | |||
| Bond Type | Bond Amount |
Above 700 |
Between 650-699 |
Between 600-649 |
Below 599 |
| New & Used Motor Vehicle Dealer and/or Auto Recycler Bond | $50,000 | $500-$1,000 | $750-$1,500 | $1,000-$2,000 | $1,500-$3,500 |
Standard Markets
In general, credit score takes precedence over all other factors in its importance for sureties. Personal credit score is the key indicator of an applicant’s ability to sustain their business, and stay afloat of all financial matters.
Applicants with a high credit score are deemed more reliable and are offered a lower rate on their New Mexico motor vehicle dealer bond, between 1,5%-3% of the total bond amount. Those applicants who have a somewhat lower credit score can, in turn, expect a slightly higher rate - one between 3%-4%.
Which surety bond agency you work with can also affect your bond cost. Not all agencies can provide you with the same rates, so getting bonded with the right agency is imperative.
Bryant Surety Bonds can offer you the best rates on New Mexico auto dealer bonds, backed only by A-rated and T-listed sureties. That way you’re getting an affordable bond, backed by the best bonding companies in the country.
To get an idea of the cost of your bond, check out our surety bond calculator in the right sidebar. You can also get a precise and entirely free quote on your bond if you apply online here. Once you apply we will contact you as soon as possible with your free, no-obligations quote.
Don’t hesitate to call us at 866.450.3412 to check with us about anything related to auto dealer bonds. Bryant Surety Bonds’ experts are at your disposal to help with any questions or difficulties you have.
For more information about how surety bond rates are determined, take a look at the detailed information on our surety bond cost page.
Bad Credit Dealer Bonds
But what about applicants who have an even lower credit score, or no score at all? Getting bonded in this situation seems almost impossible, because most sureties avoid bonding such applicants.
But with our Bad Credit Surety Bond Program, you can get bonded at a good rate– between 4%-7% of the total amount– by the same expert companies that issue all of the bonds which we underwrite.
New Mexico Auto Dealer License Application and Renewal
Dealer license renewal applications in New Mexico must be submitted by February 28th on a yearly basis. Licenses usually expire on March 31st, but must be renewed earlier. The New Mexico DMV’s address to post one’s original or renewal application to is:
Motor Vehicle Division
1100 South Saint Francis Drive
Santa Fe, NM 87504-1028
Apart from your renewal or original New Mexico auto dealer license, you must also include the following verification documents:
- A certificate for continuing education
- Business license documents concerning your dealership location(s)
- A fire marshal certificate
- Your $50,000 New Mexico auto dealer bond or a bond receipt for renewal for the following year
For more details about your verification documents, get in touch with NM DMV, or check the DMV’s website for a thorough checklist of all documents and requirements.
You will also need to pay a $50 renewal application fee when you submit your application at the DMV.
Finally, don’t forget that when you renew your licenses, you will also be asked to renew your bond. The rate you get for your bond can differ from year to year. By improving your credit score, you can get lower rates each year.
Get Your New Mexico Auto Dealer Bond Today
To get your New Mexico auto dealer bond, apply online here through our very simple and highly secure application tool. Just fill in your surety bond application and we’ll take care of the rest. Auto dealer bonds are approved quickly in most cases, so you won’t have to wait for long.
If you have any further questions before you apply for your bond, just call us at 866.450.3412. We can provide you with further information about your bond and help you with the application process. We’ll be happy to hear from you!
