Automobile brokers in the state of New York will soon need to meet new licensing and bonding requirements. Assembly Bill A6884A alters the rules that govern the functioning of dealerships in the state. It has passed the Assembly and the Senate and has been signed by the Governor.
One of the major changes that the new bill introduces is that brokers now have to post а higher motor vehicle dealer bond amount. The text also brings about new definitions and procedures that automobile professionals have to comply with. Here are the most important points to consider if you’re a broker in the state.
The new automobile broker bond amount
The licensing body for automobile brokers in New York is the Division of Licensing Services. It is different from the governing authority for dealerships, which is the state Department of Motor Vehicles.
Until recently, brokers had to obtain a $75,000 bond in order to get a state certificate of registration. However, the new bill raises this amount to $100,000. You need to provide the bond in the official form.
The text also sets clearer definitions of the cases in which brokers need to obtain a certificate of registration. The governing law is still Article 35-B of the state General Business Law.
How to save on the bonding costs
While the amount for New York auto broker bonds has been increased, this does not necessarily mean that your surety bond price will go up significantly. You only have to cover a percentage of the bond amount to get bonded. It is called the bond premium. For applicants with good finances, the typical rates are between 1% and 3%.
If you would like to decrease your bonding costs, you can work on improving your credit score and overall financial situation. The better these factors are, the lower the bonding percentage will be. By covering any outstanding payments, you can bring down the bond premium even though the required bond amount has been hiked by the state.