To legally operate as a motor vehicle dealer in Hawaii, you must be licensed by the Hawaii Motor Vehicle Industry Licensing Board (MVILB). As part of the licensing process, dealers are required to provide financial security, either by securing a qualifying inventory or flooring line of credit or, if that line of credit cannot reasonably be obtained, by purchasing a Hawaii auto dealer surety bond.
The auto dealer bond protects consumers and the State of Hawaii by ensuring dealers comply with the Motor Vehicle Industry Licensing Act and conduct business ethically.
Hawaii Auto Dealer Bond at a Glance
- Purpose: To protect consumers, discourage fraudulent or unethical vehicle sales practices, and provide financial recourse if a dealer violates state law.
- Who Needs It: New and used motor vehicle dealers, motorcycle and motor scooter dealers, and motor vehicle auction dealers—anyone who sells 3 or more vehicles per calendar year.
- Regulating Authority: Hawaii Motor Vehicle Industry Licensing Board (DCCA)
- Bond Amount: $10,000 to $200,000, depending on dealer type and average monthly sales volume.
- Premium Rate: Premiums typically start at 1% of the bond amount, with rates based on credit, financial strength, and dealership experience.
A Hawaii auto dealer bond may be used in place of a line of credit for the following dealer licenses:
- New Motor Vehicle Dealers: Businesses selling newly manufactured vehicles, either exclusively or alongside used vehicles.
- Used Motor Vehicle Dealers: Dealers selling pre-owned vehicles to consumers or other dealers
- Used Motorcycle and Motor Scooter Dealers: Dealers selling two-wheeled motor vehicles, including scooters and motorcycles.
- Motor Vehicle Auction Dealers: Companies licensed to auction motor vehicles to dealers or to the public, who can post a $200,000 bond as an alternative to the $100,000 secured line of credit.
How Much Does a Hawaii Auto Dealer Bond Cost?
When obtaining a surety bond, you don’t pay the full bond amount up front. Instead, you pay a premium, which is a small percentage of the total bond value.
Surety companies typically evaluate factors such as personal credit, business financials, time in operation, and overall financial stability. Dealers with strong credit profiles and solid financials often qualify for rates between 1% and 3% of the required bond amount.
For example, a $25,000 auto dealer bond in Hawaii may cost as little as $250 to $750 per year, depending on your qualifications. Even if your credit is less than perfect, Bryant Surety Bonds can still help you secure the required coverage through our Bad Credit Surety Bond Program. As your financial profile improves, you may become eligible for lower rates at renewal.
To help you plan your licensing costs, below are the Hawaii auto dealer bond amounts established by state law, along with estimated annual premiums.
| Bond Type | Bond Amount | Bond Cost |
|---|---|---|
| Used motor scooter and motorcycle dealers | $10,000 | Starts at $100 |
| Used vehicle dealers with monthly sales under sixty units | $25,000 | Starts at $250 |
| Used motor vehicle dealers averaging at least sixty vehicle sales per month | $100,000 | Starts at $1,000 |
| New vehicle dealers averaging under ten new vehicle sales each month | $50,000 | Starts at $500 |
| New vehicle dealers with average monthly sales of at least ten new vehicles. | $200,000 | Starts at $2,000 |
The cost of a Hawaii auto dealer bond is influenced by factors including credit quality, capital and debt structure, overall financial condition, and time in business.
- Dealers with strong credit and stable finances typically pay 1%–3%
- Mid-range applicants with fair credit and limited experience often see rates of 3%–5%
- Applicants with poor credit or weak financials may pay up to 10%
If your credit isn’t perfect, you can still get an estimate using our Surety Bond Cost Calculator. Simply select your bond type, the state you operate in, your credit range, and the required bond amount to preview your cost.
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How to Get a Hawaii Auto Dealer Bond
- Complete a short online application - Provide your business information and required bond amount.
- Receive an instant quote - No obligation and no upfront payment required.
- Approve and pay securely - We issue your official bond quickly so you can meet licensing deadlines.
The bonding process can often be completed in as little as one business day, helping you avoid delays that could slow your licensing timeline. Whether you’re opening a new dealership or expanding an existing one, Bryant Surety Bonds, licensed to issue surety bonds in Hawaii with license #493491, ensures your bonding requirements are handled accurately and efficiently.
How to Get an Auto Dealer License in Hawaii
To obtain an auto dealer license in Hawaii, applicants must submit a completed license application to the Hawaii Motor Vehicle Industry Licensing Board along with several supporting documents. These include a self-inspection premises report with a drawn layout of the business location, photographs of the premises (interior, exterior, office, and vehicle display areas), and a signed lease or rental agreement covering a minimum 12-month term. Dealers must also provide either a qualifying inventory or a flooring line of credit or a surety bond, a $50 application fee, and a current financial statement.
Additional requirements may apply depending on the dealership’s structure and operations. New vehicle dealers must submit a manufacturer or distributor agreement, while businesses formed as LLCs, corporations, or partnerships must include business entity registration documents or a Certificate of Good Standing. Dealers operating under a trade name must provide trade name registration, and all applicants must confirm zoning compliance for their location. Dealerships that perform vehicle repairs must hold a valid Motor Vehicle Repair Industry Board license, and applicants must list the names and license numbers of all employed salespersons.
Applications and supporting documents may be submitted in person at:
335 Merchant St.
Room 301, Honolulu
HI 96813
Alternatively, they may be sent by mail to:
Motor Vehicle Industry Licensing Board
DCCA, PVL Licensing Branch
P.O. Box 3469
Honolulu, HI 96801
For a detailed, step-by-step breakdown of the licensing process, visit our dedicated Hawaii Auto Dealer License Guide.
Hawaii Auto Dealer Bond Renewal
Dealer licenses in Hawaii expire on June 30 of even-numbered years, regardless of the date of issuance.
If you use a surety bond instead of a line of credit:
- Your bond must be renewed annually
- The bond must remain active at all times to keep your license in good standing
Failure to maintain an active bond can result in license suspension or disciplinary action.
FAQs
What happens if a claim is filed against a Hawaii auto dealer bond?
If a consumer or the State of Hawaii files a valid claim alleging that a dealer violated state law or licensing requirements, the surety may pay damages up to the bond amount. The dealer is then legally required to reimburse the surety for any paid claims, along with associated costs.
Does a Hawaii auto dealer bond protect the dealer?
No. A surety bond does not function like insurance for the dealer. The bond protects consumers and the state, not the dealership. The dealer remains financially responsible for all valid claims paid under the bond.
Does a Hawaii auto dealer bond cover multiple dealership locations?
No. Per HRS § 437-7(i), a dealer’s license authorizes business only at the licensed premises shown on the application. If you operate from more than one location, each branch needs its own dealer license—the Board has a separate Motor Vehicle Dealer Branch Location application for this—and each license requires its own financial security (line of credit or surety bond).
How long does it take to get a Hawaii auto dealer bond?
Applicants receive a quote instantly, and the bond can typically be issued within 24 hours of approval and payment. Applicants with strong credit often qualify for instant approval. Once issued, you’ll receive your bond certificate to file with your dealer license application.
Will applying for an auto dealer bond in Hawaii affect my credit score?
No. Sureties evaluate your application using a soft credit check, which is invisible to lenders and does not appear on the credit report they pull. You can request and compare quotes without any impact on your credit standing.
Can I get a Hawaii auto dealer bond if I have bad credit or past financial issues?
Yes, in most cases. Through our Bad Credit Surety Bond Program, applicants with low credit scores, prior bankruptcies, or other financial setbacks can still get bonded. Premiums for bad-credit applicants generally fall in the 5%–10% range, but our network of top-rated sureties allows us to find competitive pricing even in difficult situations.
Why would I get a bond instead of a line of credit?
Hawaii’s default expectation under HRS § 437-7(d) is that dealers obtain an inventory or flooring line of credit ($500,000 for new vehicle dealers, $50,000 for used dealers, $100,000 for auctions). The surety bond is the alternative the Board allows when that line of credit cannot reasonably be obtained. In practice, many dealers also prefer the bond simply because the annual premium is far cheaper than tying up tens or hundreds of thousands in a credit facility—and you only need to qualify with the surety, not lock up capital with a bank.
