New York Auto Dealer Bond Overview
The New York auto dealer bond is a surety bond that must be obtained by auto dealers in the state of New York who sell used or new motor vehicles. It is required by the New York State Department of Motor Vehicles (DMV) during the car dealership licensing process. The auto dealer bond works as a financial guarantee that auto dealers in the state will comply with state regulations pertaining to their business license.
As all surety bonds, the auto dealer bond works as a three-part agreement, which offers protection to the public and the state in case of auto dealer fraud or dishonesty. The agreement is made between the auto dealer (the principal), the New York State Department of Motor Vehicles (obligee) and the surety, which backs the bond financially.
In case of fraud or misconduct, a claim can be made against the auto dealer bond, and the surety compensates the obligees for their losses up to the total bond amount. The principal must then, in return, indemnify the surety for the compensation it has made.
Read on below about the licensing requirements for New York auto dealers, and how much New York DMV bonds cost.
New York Auto Dealer Bond Cost
New York auto dealer bonds differ in their bond amount, depending on whether the dealer will be selling new or used cars, as well as the amount of cars they sell. Bond amounts for used car dealers will be increased effective Apr. 8, 2017, so the table below contains the new amounts.
According to NY state’s Vehicle and Traffic Law section 415 (6-b), the required bond amounts are:
|Type of Auto Dealer Bond||Bond Amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Used car dealers who sell up to 50 vehicles annually||$20,000||$200-$400||$300-$600||$400-$800||$600-$1,400|
|Used car dealers who sell more than 50 vehicles annually||$100,000||$1,000-$2,000||$1,500-$3,000||$2,000-$4,000||$3,000-$7,000|
|Franchises, dealers of larger vehicles (SUVs, light trucks, etc)||$50,000||$500-$1,000||$750-$1,500||$1,000-$2,000||$1,500-$3,500|
The cost of your bond is determined by sureties on an individual basis when you apply for a bond. It is a fraction of the total amount of your bond.
The exact percentage of your rate depends on a number of financial indicators which sureties consider:
- Your credit score
- Financial history
- Asset profile
- Your experience and reputation in the industry
Among these, personal credit score is the most important financial indicator. Applicants with a high credit score can expect to receive a rate between 1,5%-3% of the total bond amount. For a slightly lower credit score, you can expect to be offered a rate between 3%-4%.
Reliable surety bond agencies work only with top surety bond companies, which enables them to provide you with the best rates. At Bryant Surety Bonds, all our surety partners are A-rated and T-listed. This guarantees the quality of their backing, their professionalism, and their ability to provide us with the most competitive rates on all bonds.
You can make an initial calculation of your New York auto dealer bond cost, by using our surety bond calculator on the right. If you’d like to receive an exact quote, just apply online. We’ll get back to you shortly with an entirely free quote on your bond.
If you’d rather speak to us directly, call (866)-450-3412 anytime to reach one of our experts, and receive answers to all your surety bond-related questions.
Still wondering exactly how your cost is determined? Have a look at our surety bond cost page for all the details.
Bad Credit Dealer Bonds
There’s good news for applicants with a low credit score: they can also obtain a New York motor vehicle dealer bond. By applying through our Bad Credit Surety Bond Program, you can get your bond in about the same amount of time as high credit applicants.
Applicants with lower credit usually have a slightly higher rate on their auto dealer bond, which ranges between 4%-7%. This is due to the increased risk in bonding bad credit applicants, but the higher rate in no way reduces the quality of the bond. All our clients get only the best rates by the best surety bond companies. Guaranteed!
New York Auto Dealer License Application and Renewal
Apart from obtaining a surety bond, car dealers must also provide a number of other documents when applying for their license in the state of New York. The address to which you must submit a hard copy of your dealer license application (Form VS-1) is:
NYS DMV Bureau of Consumer & Facility Services
P.O. Box 2700
Albany, NY 12220-0700
Documents which you must submit along with your application include:
- A continuous New York auto dealer bond (bond amount of $10,000, $25,000 or $50,000)
- Proof concerning the right to use the business property
- Sales Tax ID Number and Sales Tax Certificate of Authority
- Workers Compensation Insurance
- Application and license fees (MV-50)
Business licenses and registrations are valid for 2 years, which means that once you are licensed as a dealer you will need to renew your license in 2 years. The NY DMV’s website allows for license renewal to be made online or by mail.
When renewing your license you will also have the chance to get a better rate on your bond. If you’ve improved your credit score since you obtained your bond or any of the other financial indicators, you may be eligible to receive a better rate on your bond.
Learn how to start your own car dealership and even more details about the licensing process by downloading our FREE ebook guide!
Get Your New York Auto Dealer Bond Today
Your New York motor vehicle dealer bond is only a few clicks away. Apply online through our website by filling in the simple bond application. Approvals on auto dealer bonds are relatively fast, so you can expect your free bond quote in a very short amount of time.
Would you like to know more before applying? Call us at (866)-450-3412 to speak to one of our surety bond experts! They know everything about the surety bond requirements in New York state, and can help you get bonded. We’ll be happy to help!