West Virginia Auto Dealer Bond Overview
When you start your dealer licensing process in West Virginia, you’ll need to obtain an auto dealer bond. If you’ve never stumbled upon this term, you might be wondering why it’s required. So how exactly does the bond work?
In practical terms, the West Virginia motor vehicle dealer bond is a three-party agreement. Your dealership is the principal, the State of West Virginia is the obligee requiring the bond, and the surety is the entity underwriting it.
Unlike insurance, the dealer bond functions as a protection for your customers. It guarantees that you can comply with all relevant West Virginia legislation, and thus can ensure lawful handling of your business. In this sense, it is a sign of the trustworthiness of your company.
- Bond: Motor Vehicle Dealer Bond
- Obligee: West Virginia Department of Transportation – Dealer Services
- Required Expiration Date of Dealer Bond: June 30th
- Surety Bond: The bond is not continuous, so it requires a Continuation Certificate
What happens if you fail to follow the law? Then a claim can be made against your bond. Initially, the surety that has underwritten the bond will take care of covering all penal costs, up to the bond amount. However, as the indemnity agreement signed during the bonding states, the dealer needs to fully reimburse the surety afterwards. That’s why it’s wise to stick to state regulations, in order to avoid claims that could seriously harm your dealership.
Auto Dealer Bond Cost in West Virginia
A $25,000 dealer surety bond is required for all motor vehicle dealers in the state of West Virginia.
As with other types of bonding, here you also need to pay only a percentage of the bond amount. If you qualify for the standard bonding market, your bond premium will be between 1% and 3%. This means your bond cost could be between $250 and $1,000 per year.
To get a lower bond premium, there are a few tips that you can follow. One of the most important criterion for determining the price is your credit score. Improving your credit score will certainly help you pay less for the bond. It’s also important to show proof of your dealership’s assets and liquidity, as this illustrates the overall solidity of your business.
Let’s not forget that choosing the right surety is also important for reducing your bond costs. Here at Bryant Surety Bonds, we work with numerous A-rated, T-listed surety companies. This gives us access to exclusive bonding rates that we can offer you. Plus, our experts will find the best match for your West Virginia dealership.
You can get an estimate of your bond price by using our surety bond cost calculator in the right sidebar, or learn more about how your bond premium is calculated on our surety bond cost page.
Bad Credit Program
West Virginia auto dealers with lower credit score, tax liens, bankruptcies or civil judgments might have a difficult time to get bonded. If you’re facing such a situation, don’t get disheartened.
Bryant Surety Bonds operates a bad credit surety bond program to give dealers with problematic finances the chance to get the bond they need and to stay in business. You will need to pay a bit higher premium - between 4% and 7% - in order to compensate for the risk involved. Our bond experts will examine your case and will offer you a tailored solution that best matches your situation.
Dealer Bond Renewal
Your West Virginia dealer license needs to be renewed every year before June 30th, and with that comes bond renewal too. The validity of the bond and the license need to match.
Your bond premium is likely to change from year to year. The reason is that the bond cost is based on your current business status, so if it changes, the price will follow. This is, of course, a good opportunity to improve your overall finances, so that you can pay less for your West Virginia auto dealer bond.
Make sure to follow the renewal dates, as failing to renew on time can leave you non-compliant and out of business. When you get bonded with Bryant Surety Bonds, we’ll take care to send you a reminder in due time, so you don’t miss your renewal deadline.
Get Your West Virginia Auto Dealer Bond Today
The bonding process might sound complicated, but it’s actually quite straightforward. Just apply online and you will get a free quote in no time. You can also call us at (866)-450-3412. Our surety bond experts will be happy to help you out with your application and answer all of your questions.
Once you’ve received your completed bond, make sure to save a copy for future reference, as the original needs to go with your license application.