South Dakota Auto Dealer Bond Overview
All used- and new-car dealers in South Dakota need to have an auto dealer bond for as long as they are in business. Almost all states require this type of surety bond as a pre-licensing requirement. The purpose is to protect car buyers and make sure they can seek reimbursement if they are defrauded.
Auto dealer bonds, like all surety bonds, are a three-party agreement between the dealer, the state, and a bonding company, which backs the agreement by underwriting the bond. If the dealer is guilty of violation of the agreement, an affected party can file a claim. If the claim is found valid by a court, the dealer will have to reimburse the claimant. Car dealers should always be up-to-date with state legislation that may affect them, as bond claims are never a desirable scenario.
Here’s a quick overview of the dealer bond requirement in South Dakota:
Bond Name: South Dakota Motor Vehicle Dealer Bond
Obligee: Division of Motor Vehicles
445 East Capitol Avenue
Pierre, South Dakota, 57501
Expires: Same date as the license
You can apply directly for your South Dakota auto dealer bond by clicking the Start Your Application button on the right, or continue reading for more information about this type of bond.
South Dakota Auto Dealer Bond Cost
To understand the price you will end up paying for your South Dakota auto dealer bond, you first have to know the total bond amount required from you. The total bond amount is the maximum penal sum of the bond and is determined by the state. It may vary depending on the license you hold:
- New and Used Car Dealers - $25,000
- Mobile Home Dealer - $25,000
- Motorcycle Dealer - $5,000
- Snowmobile Dealer - $5,000
- Off-road Vehicle Dealer - $5,000
- Final Stage Manufacturer Dealer - $25,000
- Boat Dealer - $20,000
- Emergency Vehicle Dealer - $10,000
- Dealers Car Auction Agency - $50,000
For each of these bonds, dealer pay premiums determined by the bonding company which underwrites them. Premiums are most frequently calculated based on the applicant’s credit score. Standard rates for applicants with good credit are between 1% and 3% of the total amount.
Other factors that can be considered as part of your application include your asset profile, resumé, and financial statements (both business and personal).
Do not underestimate your choice of surety bonds agency either. Since bonding companies don’t work directly with dealers, the expertise of your agency is very important. Bryant Surety Bonds works only with the best A-rated and T-listed bond underwriters in the country, and can match you with the one offering the best quote for your application.
To learn more about the subject, go to our How Much Does a Surety Bond Cost? page.
Bad credit auto dealer bonds in South Dakota
Even with bad credit, for 99% of applicants, getting a South dakota auto dealer bond will still be within reach. We offer an exclusive Bad Credit Surety Bonds program, which gives you access to the same strong bonding providers.
Premiums for bad credit applicants are slightly higher because of the higher risk sureties undertake. This is why premiums may vary between 4% and 7% of the total bond amount. Over time, you can reduce your premiums when renewal is due if you take steps to improve your credit score, or are able to demonstrate financial strength.
South Dakota Dealer License - Application and Renewal
When you obtain your South Dakota dealer bond, there are a number of other licensing requirements you need to fulfill. Some of them include acquiring a zoning approval, obtaining insurance, a phone number and get your site approved by an inspector.
A full list of the requirements is available on the website of the DMV. Each dealer license type has different requirements and application fees, so make sure you research them well before applying.
South Dakota dealer licenses are issued for 5-year periods, but each year you will have to submit a License Renewal Notice and Billing and pay a renewal fee, as well as a dealer plate fee. Failure to do so will lead to the revocation of your license. You auto dealer bond needs to be renewed yearly as well.
Get Your South Dakota Auto Dealer Bond Today!
Now that you have all the information, you can apply online and get your South Dakota auto dealer bond. When you submit the form, which should take no more than a few minutes, you will get your free bond quote, which comes with no obligations.
We will contact you to help you through the next steps of the application process, and will make sure to get your bond ready within 1 or 2 days of receiving payment. Dealer license applications will require that you submit the original bond form, though you can always request copies via fax or email.
If you need any assistance on our part, we will be more than happy to help. Simply call us at (866)-450-3412!