Wisconsin Auto Dealer Bond Overview
When you start your auto dealership licensing process in Wisconsin, you will be asked to post a Wisconsin auto dealer bond. The auto dealer bond is a guarantee for the state, and the general public, that you will follow all applicable Wisconsin regulations.
How does the bond work? In practice, it’s a three-party contractual agreement. Your Wisconsin car dealership is the principal asked to post the bond, the Wisconsin Department of Transportation’s Dealer and Agent Section is the obligee requiring it, and the surety is the bond underwriter. Besides protecting the citizens of Wisconsin from fraudulent dealers, it also indicates to your customers that your business is a trusted partner.
- Surety Bond Name: Wisconsin auto dealer bond
- Surety Bond Amount:
- $50,000 bond for retail dealers
- $25,000 bond for salvage dealer, recreational vehicle dealer, wholesale dealer or wholesale auction dealer
- $5,000 bond for motorcycle dealer
- Obligee: Wisconsin Department of Transportation’s Dealer and Agent Section
- Required Expiration Date of Dealer Bond: Effective for 12 months
- Surety Bond: Continuous
If you haven’t worked with surety bonds before, it’s worth noting that they do not protect your business like insurance does. Instead, they guarantee the interests of your clients will be safeguarded. If you fail to follow the applicable Wisconsin regulations, you can face a claim against your bond. You will be liable to cover any losses up to the penal sum of the bond– $5,000, $25,000 or $50,000– if the claim is proven. Although the surety pays for the costs at first, full reimbursement is expected from your dealership shortly after. Avoiding claims can save you a lot of money– and the good standing of your business.
Wisconsin Auto Dealer Bond Cost
To give you an idea of how much you can expect to pay for your Wisconsin motor vehicle dealer bond, let’s look at the way in which the surety bond cost is formed.
Depending on the type of license you need, you will be required to post a $5,000, $25,000 or $50,000 Wisconsin auto dealer bond. These bonding amounts, however, are not the actual price for you. Instead, you are asked to pay only a percentage of them, called a premium.
- 1% to 3% of the bond amount is the usual premium for applicants with credit score above 650.
- Between 2.5% and 5% of the bond amount if your credit score is between 600 and 649.
- If you have to post a $25,000 Wisconsin auto dealer bond, you might have to pay only $250.
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||Bond Amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Wisconsin Retail Dealer Bond||$50,000||$375-$750||$500-$1,500||$1,250-$2,500||$2,500-$5,000|
Wisconsin salvage dealer,
recreational vehicle dealer,
wholesale dealer or wholesale auction dealer bond
|Wisconsin motorcycle dealer bond||$5,000||$100||$100-$150||$125-$250||$250-$500|
Getting your exact bond premium happens only after you submit a full bond application. Your surety will make a thorough assessment of the financial strength of your business, including your personal credit score. This is needed in order to benchmark the risk of getting you bonded is. A general guideline is that you will pay less for your Wisconsin auto dealer bond if your finances are in good shape.
What are the main factors that you need to improve to get a better bonding rate? The main ones include:
- Your personal credit score - the most important indicator
- Showcasing assets and liquidity
- Overall business financials
- Professional experience in dealerships
Boosting your financial stats is the best way to reduce your surety bond cost. Yet there is one more thing you can do to pay less for your Wisconsin motor vehicle dealer bond: choose the right surety bond agency. Bryant Surety Bonds partners with various A-rated, T-listed surety companies. That’s why we’re able to find the best bonding option for your specific case, offering you the most competitive rates on the market.
Our surety bond cost calculator, which is on the right sidebar of the page, can give you an immediate estimate of your bond cost. For your exact Wisconsin dealer bond quote, apply online or call our surety bond experts today at (866)-450-3412.
Bad Credit Program
Being a Wisconsin car dealer has its ups and downs. If times have been tough and your credit score is lower, our Bad Credit Surety Bond Program is the right choice for you. The same goes if you are an applicant with tax liens, civil judgments, bankruptcies, or other financial issues.
If your credit score is below 600, you can expect a bond somewhere between 5% and 10%, needed to mitigate the higher risk. You will have to pay slightly more for your Wisconsin auto dealer bond, but you’ll be able to stay in business and rebuild your finances over time. Here at Bryant Surety Bonds, we’re dedicated to getting you bonded whatever your credit situation is.
Wisconsin Auto Dealer License and Renewal
When applying for your Wisconsin car dealer license, obtaining a Wisconsin auto dealer bond is only one of the main requirements. To get you fully prepared for the licensing process, let’s look at the rest of the prerequisites.
The first step you need to take is to identify what type of license fits best the dealership you’d like to open. Here are a few of the types of licenses, depending on which vehicles you plan to sell.
- Mopeds only: Moped Dealer License
- Motorcycles in addition to mopeds: Motorcycle Dealer License
- Mopeds, motorcycles and a wide array of other vehicles: Retail Dealer License.
There are other, specialized options as well, such as the Wholesale Dealer License, Salvage Dealer License, and Recreational Vehicle Dealer License. You can consult all types of motor vehicle business licenses in Wisconsin to identify the one you need.
Besides completing the correct application form, in most cases you need to submit the following documents too:
- Proof of a permanent business location
- Zoning and local permit approval for the location
- A sales tax seller permit from the Department of Revenue
- At least one licensed salesperson
- Business sign and posted hours
- Franchise certificate if you will be selling new vehicles
- Proof of payment of all applicable dealer license fees
- $50,000 bond for retail dealers, $25,000 bond for salvage dealers, recreational vehicle dealers, wholesale dealers or wholesale auction dealers, $5,000 bond for motorcycle dealers
There will be slight variations in the requirements from one type of license to the other. Once you’ve submitted all needed documents, the Wisconsin Department of Transportation’s Dealer and Agent Section will assess your application. Your Wisconsin car dealer license will be issued if you meet all conditions.
Most dealer licenses in Wisconsin expire every two years. Your Wisconsin auto dealer bond needs renewal every 12 months. As your finances might change over time, make sure to showcase their strength with your next bond application, so you can reduce your surety bond cost.
It’s advised to save copies of your original Wisconsin auto dealer bond form for future reference. Keeping copies of other licensing documents is also a good idea.
Get Your Wisconsin Auto Dealer Bond Today
You can apply online today, or call us at (866)-450-3412 to start your bonding process. Your Wisconsin dealer bond quote is a click away! We are here to help in case you have any questions about your bond application or bonding conditions.