Virginia Auto Dealer Bond Overview
Launching your own auto dealership in Virginia is surely a promising venture, and it all starts with obtaining your Virginia auto dealer license. Getting a Virginia auto dealer bond is an indispensable step in that process.
An auto dealer bond, similarly to other Virginia surety bonds, is a three-party contract. The principal is your auto dealership that needs to post a bond, the obligee is the authority that requires it, and the bond provider is the surety.
- Surety Bond Name: Virginia motor vehicle dealer bond
- Surety Bond Amount: $50,000 motor vehicle dealer bond
- Obligee: Virginia Motor Vehicle Dealer Board
- Required Expiration Date of Dealer Bond: N/A
- Surety Bond: Continuous
Contrary to popular misconceptions, surety bonds are not in place to protect your auto dealership. Instead, they safeguard your clients from any potential misdeeds on your side. If you fail to abide by Virginia laws, they can make a claim on your bond. If the claim is proven, you will be liable to reimburse them for any losses. The claim, which can be up to $50,000, the penal sum of the bond, will be covered initially by the surety. You’re required to repay them. That’s why it’s a good idea to avoid claims, as the financial burden can be substantial.
In this sense, your Virginia motor vehicle dealer bond functions as an additional layer of protection for the state and your clients. For the general public, your surety bond is also a strong indication that your business can be trusted to deliver a high quality of service.
Virginia Auto Dealer Bond Cost
Before you start the bonding process, let’s look at the surety bond cost and how it’s formulated.
The required bond amount for your Virginia auto dealer bond is $50,000. While this might seem like a lot, you need to pay only a percentage of this bonding amount, which is called the bond premium.
- If your credit score is above 650, you can expect a premium between 1% and 3% of the bond amount.
- For credit scores between 600 and 649, the usual bond premiums are between 2.5% and 5% of the bond amount.
In the case of Virginia, this means that you might end up paying only $500 for the required $50,000 Virginia auto dealer bond.
You can consult the surety bond costs that you can expect to pay in the different credit score ranges in the table below.
||Auto Dealer Bond Cost Based On Credit Score|
|Surety Bond Name||Surety Bond Amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Virginia Motor Vehicle Dealer Bond||$50,000||$375-$750||$500-$1,500||$1,250-$2,500||$2,500-$5,000|
When you submit your bond application, you can get the exact percentage of your Virginia auto dealer bond premium. The surety thoroughly examines your business, your financial profile, and your personal credit score. If your dealership is assessed as low-risk, your surety bond cost will be lower, too.
The primary factors that the surety must review when you submit your application include:
- Your personal credit score
- The strength of your assets and your liquidity
- Business financials
- Years of professional experience in the field
Working with the right surety bond agency is another factor that can decrease your bond cost. Here at Bryant Surety Bonds, we partner with multiple A-rated, T-listed surety companies, which means we have access to exclusive bonding rates. We can shop around for you, and provide you with the lowest price for your specific conditions.
In the right sidebar of the page, you can consult our surety bond cost calculator and receive an immediate estimate of your Virginia auto dealer bond cost. If you’d like to get your exact quote today, call us at (866)-450-3412 or apply online.
Bad Credit Program
After years of providing auto dealer bonds in all states, we are aware that getting your Virginia auto dealer bond can be problematic if you have bad credit. To help dealers with problematic finances, we are proud to offer Bryant Surety Bonds’ Bad Credit Surety Bond Program.
Even if you have a low credit score, past bankruptcies, civil judgments or tax liens, we can still get you bonded at the best possible rate. For applicants with credit scores below 600, the usual premiums range between 5% and 10%. The slightly higher prices are needed since the risk involved in bonding is higher. In any case, the bad credit bonding option is still a great opportunity to keep your business running and get on top of your finances in no time.
Virginia Auto Dealer License and Renewal
To obtain your Virginia auto dealer license, you’ll need to provide a number of other documents besides your Virginia auto dealer bond. We’ve prepared an overview of the requirements to help you get started.
To start your application with the Virginia Motor Vehicle Dealer Board, you can consult the Motor Vehicle Dealer Licensing Laws for a complete summary of everything you need to know and comply with. You can find the basics of the licensing process there as well.
Along with your completed license application, you’ll likely be asked to provide the following:
- Proof of sales, service, and office space of 250 square feet, capable of displaying a minimum of ten vehicles
- Certificate of Zoning Compliance
- Display of a business sign and business hours
- Successful completion of the Dealer-Operator/Salesperson Qualification Test administered in your local DMV
- Submission of all additional forms listed in the New Dealership Packet
- About $600 license fees payment
- $50,000 Virginia motor vehicle dealer bond (MVDB-2 Form)
After submitting the full package of documents and paying the applicable fees, if there are no issues with your application, the Virginia Motor Vehicle Dealer Board will issue your Virginia auto dealer license.
You need to renew your license every year, which also means you need to get a Virginia auto dealer bond renewal. As your financial stats change from year to year, you can expect that your surety bond cost will also fluctuate. This means that improving your finances over time is bound to reduce your bond price too.
Get Your Virginia Auto Dealer Bond Today
Your Virginia auto dealer bond is just a few steps away. The process involves as little complications as possible: you just need to apply online to get your FREE quote and start the bonding process. Don’t hesitate to contact our bonding experts at (866)-450-3412 in case you have any questions about the process or your bond application. We’re here to help!
When you obtain your Virginia auto dealer bond, it’s a good idea to keep copies of the original bond form and other documents that you submit with your license application for future reference.