Businesses involved in selling, leasing, or facilitating the transfer of motor vehicles in Minnesota are required to be licensed before conducting any transactions. Dealer and vehicle-related licenses are administered by Minnesota’s Driver and Vehicle Services (DVS). For many of these licenses, securing a Minnesota auto dealer bond is a required step in the approval process.
The surety bond serves as a financial safeguard when a licensed dealer or vehicle business fails to comply with Minnesota statutes, misrepresents transactions, or neglects to fulfill required tax or fee obligations. Maintaining an active bond is mandatory for keeping a valid license and remaining in good standing with state regulators.
Minnesota Auto Dealer Bond at a Glance
- Purpose: Protects buyers and the state by ensuring financial recourse if a dealer engages in unlawful practices, misrepresents transactions, or leaves financial obligations unpaid.
- Who Needs It: Vehicle dealers, brokers, wholesalers, auctioneers, lessors, and certain specialty vehicle businesses
- Regulating Authority: Minnesota Driver and Vehicle Services (DVS)
- Bond Amount: Ranges from $5,000 to $50,000, depending on the license type
- Premium Rate: Pricing often begins near 1% for applicants with strong qualifications and adjusts based on credit history, financial capacity, and experience
Minnesota requires surety bonding for a wide range of vehicle-related licenses, including:
- New motor vehicle dealers – Franchised sellers authorized to market new vehicles and, in some cases, used inventory under the same license.
- Used motor vehicle dealers – Dealers whose business involves buying and reselling previously owned vehicles.
- Limited used vehicle dealers – Qualifying nonprofit organizations that sell donated vehicles to support charitable activities.
- Boat trailer, snowmobile trailer, horse trailer, and motorized bicycle dealers (DSB) – Businesses engaged in the commercial sale of motorized bicycles and mopeds, or boat, snowmobile, and small horse trailers.
- Salvage pools – Entities that store and offer damaged or total-loss vehicles for sale on behalf of insurance carriers.
- Motor vehicle lessors – Companies that rent or lease vehicles for hourly, daily, or extended periods.
- Motor vehicle wholesalers – Dealers restricted to selling vehicles only to other licensed dealers.
- Vehicle brokers – Individuals or businesses that arrange vehicle sales or lease terms without taking ownership of the vehicle.
- Auctioneers – Operators who conduct public vehicle auctions for third-party owners.
How Much Does a Minnesota Auto Dealer Bond Cost?
When securing a Minnesota auto dealer bond, you don’t pay the full bond amount up front. Instead, you pay an annual premium, which represents a small percentage of the total bond required by the state.
Surety companies calculate this premium by reviewing several aspects of your financial and business profile, including personal and business credit history, available assets, outstanding liabilities, overall financial stability, and experience operating within the vehicle industry. Applicants with stronger profiles typically qualify for lower rates.
For example, a $50,000 Minnesota auto dealer bond may cost as little as $500 per year for well-qualified applicants, while a $5,000 bond for certain specialty dealers can start around $100 annually. Rates increase as financial risk rises, but coverage is still available for many applicants who don’t meet standard underwriting benchmarks.
Below are the Minnesota auto dealer bond amounts set by state regulations, along with estimated starting premiums:
| Bond Type | Bond Amount | Bond Cost |
|---|---|---|
| New and used motor vehicle dealers, limited-use dealers, salvage pools, lessors, wholesalers, brokers, and auctioneers | $50,000 | Starts at $500 |
| Boat trailer, snowmobile trailer, horse trailer, and motorized bicycle dealers (DSB) | $5,000 | Starts at $100 |
Premium rates commonly fall within the 1%–3% range for applicants with strong credit, steady finances, and relevant industry experience. Dealers with average credit profiles and moderate financial risk often see rates between 3% and 5%. Applicants with credit challenges, limited reserves, or minimal operating history may receive higher quotes, sometimes approaching 10%, depending on overall risk.
If you don’t qualify for standard rates, bonding may still be possible. Bryant Surety Bonds offers access to a Bad Credit Surety Bond Program, working with experienced surety carriers that specialize in higher-risk placements to help eligible applicants obtain the coverage Minnesota requires.
To preview your potential cost, use our Surety Bond Cost Calculator below. Select your bond type, coverage amount, state, and credit range to receive a quick estimate before applying for a personalized quote.
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Get a free exact quote Get another estimateHow to Get a Minnesota Auto Dealer Bond
- Complete a short online application - Share your business name, required bond amount, and preferred contact details.
- Receive a fast, no-obligation quote - There’s no upfront cost and no commitment required.
- Approve and receive your bond - Once you accept the terms and submit payment, your official bond is issued promptly and is ready to include with your Minnesota licensing application.
In many cases, the entire bonding process can be completed within one business day, helping you avoid delays in licensing or renewal. Bryant Surety Bonds is authorized to issue surety bonds in Minnesota (license #40635795) and works with the industry's strongest bonding companies.
How to Get a Minnesota Auto Dealer License?
In addition to submitting your application, Minnesota auto dealer license applicants must generally provide the following:
- Background check and fingerprinting – Required for all owners, officers, partners, and listed individuals
- Surety bond
- Proof of liability insurance
- Proof of workers’ compensation coverage, if employees are hired
- Completed Dealer Commercial Checklist
- Zoning approval – The dealership must operate from a location approved for commercial use by the local municipality
- Proof of property ownership or lease – Documentation showing a permanent business location (leases often require a minimum one-year term)
- Franchise agreement (new vehicle dealers only)
- Copy of a valid driver’s license for each listed owner
- License fee – Varies by dealer classification (e.g., approximately $250 for most motor vehicle dealers; $10 for DSB dealers)
Completed applications and supporting documents are submitted to:
Minnesota Department of Public Safety
Driver and Vehicle Services
445 Minnesota Street, Suite 186
St. Paul, MN 55101-5186
For more information about the licensing process, please visit our dedicated Minnesota Auto Dealer License Guide.
Minnesota Auto Dealer Bond Renewal
Minnesota dealer licenses are issued for one year from the month of issuance and must be renewed before that expiration date. Your surety bond runs alongside the license: you’re required to maintain continuous bond coverage for as long as you hold a license, and the bond stays in effect until canceled by you or the surety. The annual premium you pay your surety keeps coverage active for the next license term.
License renewals are typically processed online through the Minnesota DVS CARS e-Services system, with annual license fees of $150 for most motor vehicle dealer licenses and $10 for DSB licenses. To keep your bond aligned at renewal, pay your surety premium on schedule, file any updated documentation DVS requests (such as proof of insurance or business activity), and resolve any compliance items they flag. Bryant Surety Bonds will reach out before each renewal billing date with an invoice and instructions, so coverage stays uninterrupted.
Important Update for Minnesota Auto Dealers
Under Minnesota law, effective July 1, 2025, dealers may possess no more than 50 standard dealer license plates at any time; this limit does not include in-transit plates issued for transporting vehicles. Also, the updated rules clarify how dealer plates can be used on courtesy vehicles provided to customers while their vehicles are being serviced.
FAQs
What is required when a Minnesota auto dealer relocates?
When a licensed auto dealer in Minnesota changes business location, the dealer must notify the Minnesota Department of Public Safety, Driver and Vehicle Services (DVS). The update typically requires submitting:
- A bond rider reflecting the new business address
- A completed Zoning Verification Form
- An updated Commercial Location Checklist
- Proof of property ownership or a Lease Verification Form for the new location
The dealer may not operate at the new location until DVS approves the updated information.
Who is actually protected by my Minnesota auto dealer bond — me or my customers?
Your customers and the state, not you. A surety bond isn't insurance for your business; it's a financial guarantee that protects third parties. If you violate Minnesota's dealer laws — for example, by failing to deliver a clear title, misrepresenting a vehicle, or not paying required taxes and fees — a harmed consumer or the state can file a claim and be compensated from the bond. If the surety pays that claim, you're required to reimburse them in full. In short, the bond protects the public while holding you accountable.
Can I get a Minnesota auto dealer bond if my dealership is brand new with no sales history?
Yes. A lack of business history doesn't prevent you from getting bonded. Surety underwriters base your premium primarily on personal credit, not on the dealership's track record, so new and first-time dealers are bonded routinely. Most well-qualified startup applicants pay the same low rates as established dealers. If your personal credit is limited or weak, you may pay a higher percentage, but you can still secure the bond you need to launch.
How long does it take to get a Minnesota auto dealer bond?
Most applicants are quoted within a single business day, and once you accept the terms and complete payment, your official bond is typically issued within 24 hours. The signed bond is then ready to file with DVS on Form PS2446-10 (Motor Vehicle Dealer License Surety Bond) alongside the rest of your dealer license packet.
Does obtaining an auto dealer bond quote affect my credit score?
No. Sureties review your credit using a soft inquiry, which has no effect on your credit score and does not appear on the report lenders pull. You can request and compare quotes freely without any impact on your credit standing.
Can I get a Minnesota auto dealer bond if I have bad credit or past financial issues?
Absolutely. Through Bryant Surety Bonds’ Bad Credit Surety Bond Program, applicants with low credit scores, prior bankruptcies, or other financial setbacks can still get bonded. Premiums for higher-risk applicants typically run in the 5%–10% range, but our network of top-rated sureties allows us to find competitive pricing even in difficult situations.
What happens if my bond lapses during the license term?
If bond coverage lapses or is canceled, the dealer’s license may be suspended or revoked until valid coverage is restored. Even a short lapse can delay renewals or trigger enforcement action by DVS.
