Iowa Motor Vehicle Dealer Bond Overview

To become an auto dealer in Iowa, you need an Iowa dealer license from the state Department of Transportation (DoT).

In order to obtain your license, you will be asked to obtain an Iowa motor vehicle dealer bond in the amount of $75,000. The auto dealer bond is a form of security, ensuring that once you are licensed, you will comply with Iowa statutes that regulate the business of auto dealers.

The motor vehicle dealer bond is a three-party agreement. It is made between the principal (Iowa auto dealer), the obligee (Iowa DoT) and the surety company which backs the bond and vouches for the dealer’s honesty. When a surety issues the motor vehicle dealer bond, it provides a guarantee that if anyone is treated dishonestly by the car dealer, they may file a claim and receive financial compensation for their loss. If that occurs, that dealer must then compensate the surety in return.

Typically claims occur when dealers act dishonestly or unethically, and in doing so violate state regulations. A dealer’s best approach is to avoid claims altogether, by always acting in accordance with the best business practices and industry standards. A claim is a serious issue which can gravely harm a dealer’s reputation.

Here are the details of the Iowa motor vehicle dealer bond:

  • Surety Bond Name: Iowa Motor Vehicle Dealer Bond
  • Surety Bond Amount: $75,000
  • Obligee:

    Iowa Department of Transportation
    10 Euclid, Box 9278,
    Des Moines, Iowa 50306

  • Expiration Date: Continuous bond- reviewed annually

See the sections below for more information regarding the Iowa motor vehicle dealer bond.

Iowa Motor Vehicle Dealer Bond Cost

Iowa car dealers must at all times have a valid $75,000 dealer bond in order to be able to conduct business legally. To obtain the bond, though, dealers need to pay much less than the full bond amount.

The bond’s cost, or premium, is determined by the surety which backs then bond. The cost typically is a small percentage of the full amount of the bond. Sureties determine the premium of a bond based on an applicant’s personal credit score. They also take into account an applicant’s:

  • Financial statements
  • Asset profile
  • Work experience and record

Those applicants who have a high credit score and overall good financial health can expect to receive a rate on their dealer bond which is between 1,5% and 3% of the full bond amount.

Surety Bond Cost by Credit Score
Surety Bond Name Surety bond amount Above 700 Between 650-699 Between 600-649 Below 599
Iowa Motor Vehicle Dealer Bond $75,000 $750-$1,500 $1,125-$2,250 $1,500-$3,000 $2,250-$5,250

* The table provides a bond cost ballpark estimate based on the applicant's credit score. Actual bond prices can differ due to a number of factors. For an exact quote, please complete our online application. It's fast and 100% free!.

The surety agency you choose to work with also affects the cost of your bond. By working with Bryant Surety Bonds, you will have access to some of the lowest rates in the state, thanks to our highly trusted A-rated and T-listed surety partners.

Use the surety bond cost calculator on the right to get a rough estimate of your personal rate. For a precise rate, free of charge, submit a surety bond application form. We will get back to you with your quote as soon as we have processed your application.

Give us a call at 866.450.3412 if you’d like to speak to our surety professionals regarding your Iowa motor vehicle dealer bond.

Find out more about how rates are determined by sureties from our Surety Bond Cost page.

Bad Credit Auto Dealer Bonds in Iowa

If you have a low credit score, you may wonder whether you can still get approved for a bond. While many sureties turn down applicants with lower scores, Bryant Surety Bonds is happy to help these applicants get bonded, regardless of their credit score.

Our Bad Credit Program is designed to make bonds available to applicants with less-than-perfect credit. Rates for these bonds are somewhat higher, due to the increased risk, yet they are provided by the same expert sureties that back all the bonds we provide to our clients.

Iowa Dealer License: Application and Renewal

When applying to become a licensed car dealer in Iowa, you will need to fulfill a list of additional requirements, such as:

  • Completion of an educational course
  • Copy of background check
  • Credit report
  • Copy of sales tax license
  • Application fee
  • Complete license application form

For a full list of the requirements, make sure to visit Iowa DoT’s website.

Get Your Iowa Motor Vehicle Dealer Bond Today

To obtain your Iowa motor vehicle dealer bond, apply online here by submitting your surety bond application form. You will hear back from us shortly about your free bond quote.

When you purchase your bond, you will receive it in your mailbox within a few days. For convenience, we can also issue digital copies of your bond for you.

Do you have any questions? Give us a call at 866.450.3412 to speak to one of our experts. We’re here to help.


About us:
Bryant Surety Bonds, Inc. is a surety bond agency based in Pennsylvania. Licensed in all 50 states and with access to over 20 T-listed, A-Rated bonding companies, we have the contacts, expertise, and top service to provide you with a hassle-free experience, all while offering competitive rates for your surety bond.