South Carolina Auto Dealer Bond Overview
Becoming an auto dealer in South Carolina is an exciting endeavor, and getting your South Carolina auto dealer license is the first step on the way. During this process, you are required to post a South Carolina auto dealer bond in order to comply with the state regulations that apply to dealerships.
Just like other South Carolina surety bonds, the auto dealer bond is a three-party contractual agreement. Your dealership is the principal that is required to post the bond, the state is the obligee requiring it, and the surety is the bond provider.
Your South Carolina motor vehicle dealer bond guarantees that your business will abide by all relevant rules and regulations in the state, namely, Title 56 of the South Carolina Code of Laws. In a sense, the bond is a strong sign for your clients that your dealership is trustworthy and respectable.
- Surety Bond Name: South Carolina auto dealer bond
- Surety Bond Amount:
- $15,000 for wholesale auto auction, motorcycle dealers and wholesalers and travel trailers
- $30,000 for all other dealers and wholesalers
- Obligee: South Carolina Department of Motor Vehicles
- Required Expiration Date of Dealer Bond: N/A
- Surety Bond: Continuous
The main purpose of surety bonds is not to protect your dealership, but to safeguard the interests of your clients. In case you have not followed the applicable rules, a claim can be made on your South Carolina surety bond. The penal sum of the bond– $15,000 or $30,000 depending on the type of dealership you run– will then be used to reimburse any affected parties if the claim is proven. Make sure to avoid such situations, as all costs eventually need to be covered by you.
South Carolina Auto Dealer Bond Cost
Starting your South Carolina auto dealership involves getting a South Carolina auto dealer surety bond. Thus, it’s only natural that the surety bond cost is of high importance for setting your business finances.
The required bond amounts in the state are either $15,000 or $30,000, depending on the type of dealership you run. However, don’t be alarmed by these bonding amounts because you have to pay only a percentage of them. This is called your premium.
- For applicants with credit score above 650, the usual premiums are between 1% and 3% of the bond amount.
- If your credit score is between 600 and 649, you’re likely to pay between 2% and 4% of the bond amount.
A simple calculation shows that you might have to pay only $150 for a $15,000 bond for wholesale auction, travel trailer or motorcycle dealer or wholesaler bond, or $300 for a $30,000 South Carolina motor vehicle dealer and wholesaler bond.
You can consult the surety bond costs that you can expect to pay in the different credit score ranges in the table below.
|Surety bond name||Surety bond amount||Cost with credit score above 700||Cost with credit score between 650-699||Cost with credit score between 600-649||Cost with credit score below 599|
|Sorth Carolina Auto Dealer Bond for wholesale auto auction, motorcycle dealers and wholesalers and travel trailers||$15,000||$150-$300||$225-$450||$300-$600||$450-$1,050|
|South Carolina Auto Dealer Bond for dealers and wholesalers||$30,000||$300-$600||$450-$900||$600-$1,200||$900-$2,100|
The actual percentage is set by your surety when you apply for the bond. The surety makes a thorough assessment of the financial strength of your business, in order to judge what the risk of getting you bonded is. The lower the risk, the less you will have to pay.
The usual indicators that the surety considers when assessing your bond application are:
- Your personal credit score
- Assets and liquidity you can showcase
- Your business experience in the industry
- Business financials
It’s important not to underestimate the role of the surety in the formation of the bond cost too. Bryant Surety Bonds has exclusive access to great bonding rates because of its close partnerships with numerous A-rated, T-listed surety companies. This means we can get you bonded at an outstanding price - and with secure backing behind your bond.
Our surety bond cost calculator, which is on the right sidebar of the page, is a great starting point to get an estimate of your bond post. Apply online or call our surety bond experts at (866)-450-3412 for your exact South Carolina dealer bond cost.
Bad Credit Program
Due to our extensive experience with getting auto dealers bonded across the country, we understand how difficult it is to obtain the South Carolina auto dealer bond that you need if you have problematic finances. That’s why we run our Bad Credit Surety Bond Program for applicants with lower credit scores, tax liens, civil judgments, bankruptcies, or other financial issues.
We’re dedicated to getting you bonded whatever your credit situation is. If your credit score is below 600, it’s likely that your bond premium will be somewhere between 4% and 7% in order to compensate for the increased risk. While the surety bond cost for bad credit bonding is slightly higher, it gives many auto dealers the chance to start or keep their business, and work on improving their financial status.
South Carolina Auto Dealer License and Renewal
Obtaining a South Carolina auto dealer bond is only one of the requirements for getting your South Carolina auto dealer license. Let’s take a look at the rest of the prerequisites and documents.
Before you apply with the South Carolina Department of Motor Vehicles, you need to decide what the focus of your dealership will be. In case you want to be an auto dealer or wholesaler, you have to fill Form DLA-1. If you want to deal with motorcycles, travel trailers or run a wholesale auto auction, there is a different application form. You can consult the different types of auto dealer licenses available in South Carolina to decide which one you need.
The usual documents that you will have to provide along with your application are:
- Pre-licensing course certificate
- Floor plan of your retail location (including building and display areas)
- A business sign
- Garage liability insurance policy
- Sales Tax Number from the South Carolina Department of Revenue
- Incorporation papers for Inc. or LLC
- Affidavit of Eligibility (Form AD-020-A) for each owner with a share of more than 10%
- $50 license fee payment (on an yearly basis)
- $30,000 South Carolina motor vehicle dealer and wholesaler bond, or $15,000 wholesale auto auction, travel trailer or motorcycle dealer or wholesaler bond Form DLA 1B
Once the South Carolina DMV has processed your documents and approved them, you will be issued your South Carolina auto dealer license. You have to renew it every year, which means you need to have an auto dealer bond in place at all times as well. Your bond cost can change over time depending on your current credit and finances, so working on improving them gives you the possibility to reduce your surety bond cost from year to year.
Get Your South Carolina Auto Dealer Bond Today
Obtaining your South Carolina auto dealer bond is easier than ever. Just apply online today or call us at (866)-450-3412 and get your South Carolina dealer bond quote soon after. For any questions you might have about your bond application and the bonding process, don’t hesitate to talk to our bonding experts. They’d be happy to help!
Make sure to save copies of the original of your South Carolina auto dealer bond, as well as of other documents that you submit with your dealer license application.