Utah Auto Dealer Bond Overview
If you are applying for a business license as an auto dealer in the state of Utah, you will be required by the Utah MVED to post a Utah motor vehicle dealer bond. This bond is part of the application and licensing process, and serves as a guarantee for the state and the public that you will comply with the state’s regulations on auto dealerships.
The auto dealer bond serves as financial protection for its obligees (the Utah MVED and the public) against unlawful practices such as fraud. The bond functions as an agreement, which binds the auto dealer (the principal) to perform their work faithfully, which is guaranteed financially by the surety.
If the dealer is found to be in breach of regulations, the obligees have a right to file a claim against the auto dealer bond and receive compensation by the surety. The dealer must then indemnify the surety, by repaying any money it has paid to the obligees as compensation.
Continue below for detailed information about Utah MVD bond cost and licensing requirements for dealers in the state.
Utah Auto Dealer Bond Cost
The Utah Motor Vehicle Enforcement Division requires all of the following dealers to post a $75,000 Utah auto dealer bond. :
- New motor vehicle dealers
- Used motor vehicle dealers
- Large trailer dealers
The cost of your Utah motor vehicle dealer bond is determined by the surety which backs the bond. Rates are usually a fraction of the total amount of the bond, and are determined on the basis of an applicant’s:
- Credit score
- Personal and business financial statements
- Asset profile
- Industry experience
Depending on the above factors, the cost of your auto dealer bond may look like this:
|Bond Cost by Credit Score|
|Bond Type||Bond Amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Utah Auto Dealer Bond||$75,000||$560-$1,125||$750-$2,250||$1,875-$3,750||$3,750-$5,625|
Those applicants who have a high credit score are considered low-risk, and therefore receive standard market rates on their bonds. For a Utah auto dealer bond these range between 1%-3% of the total amount of the bond. And those applicants who still have a high, yet not excellent, credit score can expect rates that vary between 3%-7.5%.
Your bonding rate also depends on the surety bond agency you work with. Believe it or not, different agencies can provide you with different rates. Bryant Surety Bonds prides itself with being the #1 surety bond producer in Utah. We work with many of the best surety bond companies in the country. All of them are A-rated and T-listed at the U.S. Department of Treasury, which makes them highly reliable partners.
Try our surety bond calculator on the right to get an initial estimate of the cost of your surety bond. If, instead, you want to get a precise and free quote, аpply online here to request yours.
You can also give us a call at (866)-450-3412 if you want to know more about Utah auto dealer bonds, how surety bonds work, or how you can get bonded.
Our surety bond cost page is the right resource for you if you want to know more about the process of determining a surety bond premium. Check it out!
Bad Credit Dealer Bonds
Typically, applicants who have a bad credit score are turned down by sureties, as they present too great a risk for them to assume. Yet, throughout the years we have worked to make it possible for such applicants to get bonded.
Our Bad Credit Surety Bond Program is the result of our work, allowing applicants who have no credit score, or whose credit score is bad, to get bonded with our surety partners. Applicants under this program must pay a slightly higher rate, between 7.5%-10%. However, we still make sure to find the lowest possible rate!
Utah Auto Dealer License Application and Renewal
In order to get your Utah auto dealer license you need to submit a number of documents and certificates along with your bond. See the list below for a brief overview of what you need. The address to submit your full application is:
Motor Vehicle Enforcement Division
210 North 1950 West
Salt Lake City, Utah 84134
Along with your dealer license application you should prepare and include the following:
- An FBI Fingerprint Card and a Fingerprint Waiver (TC-465)
- Passport-format photos of owners and partners
- A $75,000 Utah auto dealer bond
- A photograph of the dealership location with the sign clearly visible
- A sales tax number
- A copy of the franchise agreement (if you’re a franchised dealer)
- A copy of your plate insurance declaration page (in order to obtain dealer plates)
- Certification that you’ve attended the required 8-hour training seminar
As you submit your application, make sure to also pay your application fee, in the amount of $127, along with $12 for each dealer plate and $25 for your fingerprint card.
You will need to renew your license on a yearly basis. Part of the renewal process is to attend a three-hour training class each year. You will need to renew your surety bond.
Surety bond premiums are subject to change from year to year, especially if you make the necessary steps to improve your credit score. If you can improve your credit score, you are almost certain to be offered a better rate next time you apply for an auto dealer bond.
Get Your Utah Auto Dealer Bond Today
To check your Utah motor vehicle dealer bond off the list, simply apply online through our website. You can expect us to contact you with your free bond quote in a very short amount of time.
If you want to speak to us, call us anytime at (866)-450-3412. Our surety bond professionals will be there to respond to any questions you may have, as well as help you with the application process if you need. We look forward to hearing from you!