Minnesota Auto Dealer Bond Overview
First-time dealers applying for a license are often confused about the dealer bond requirement. It’s important to understand that auto dealer bonds are not designed to act as insurance to the dealer, but to the public instead.
If a dealer is in violation of state laws or uses deceptive business practices, they can face a claim and have to pay financial compensation to the claimant.
Here’s the most important information you need to know about the dealer bond requirement:
Bond Name: Minnesota Motor Vehicle Dealer Bond
Bond Amount: $50,000 or
$5,000 if you only sell boats, snowmobiles, small horse trails and motorized bicycles
Obligee: Minnesota Department of Public Safety
Driver and Vehicle Services – Central Office
445 Minnesota Street, Suite 186
Saint Paul, MN 55101-5186
Expiration Date: Yearly renewal
If you want to apply for your Minnesota auto dealer bond right away, you can do so by clicking on the Start Your Application button. Alternatively, read on for more information and useful tips.
Minnesota Auto Dealer Bond Cost
You can get a rough estimate of your auto dealer bond costs in just a few steps. You first need to know the total bond amount required from you, which can be either $50,000 or $5,000 depending on the dealer license you are looking for. This amount is the maximum a claimant can be awarded if they file a successful claim.
To obtain their surety bond, Minnesota dealers will only pay a few percentages of the total amount per year. This is called the bond premium. Bond premiums are determined by the bonding company which underwrites the surety bond.
Bonding companies will look into your personal credit score. Applicants with a FICO score of 650 or more typically pay premiums between 1,5% and 3% for their auto dealer bond.
|Surety Bond Cost by Credit Score|
|Surety Bond Name||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|New & Used Motor Vehicle Dealer and/or Auto Recycler Bond||$50,000||$500-$1,000||$750-$1,500||$1,000-$2,000||$1,500-$3,500|
Our How Much Does a Surety Bond Cost? page contains useful information about all the factors determining your bond premiums.
Bad Credit Auto Dealer Bonds in Minnesota
Some applicants are apprehensive that their poor credit history will affect their ability to get bonded. It’s certainly true that dealers with bad credit are considered high-risk applicants.
With this in mind, here at Bryant Surety Bonds we have designed our bad credit surety bonds program. Thanks to it, we help the majority of applicants get bonded at rates varying between 4% and 7%.
Minnesota Auto Dealer Bond Renewal
Since dealers do not pay the full bond amount upfront, premium payments must be made annually. If there is no change in your credit or financial situation, your premium will be the same as the previous year’s.
You can begin your renewal process on the 15th of the month before your auto dealer bond expires. Choose Bryant Surety Bonds, and we'll make sure you stay compliant by sending you a renewal reminder ahead of the deadline.
Minnesota Dealer License Requirements
Besides maintaining an active auto dealer bond, Minnesota dealers are also required to go through a number of other requirements. Some of them are as follows:
- Buy liability insurance
- Get a zoning approval
- Have a commercial building
- Pay applicable fees
A full list of licensing requirements can be found on the website of the Department of Public Safety.
Get Your Minnesota Auto Dealer Bonds Today
Apply now through our online application– the fastest way to get your auto dealer bond. It requires minimal time to complete and once you submit it, we will give you a free quote almost instantly.
When payment is processed, we’ll do our best to issue your bond within 2 business days. You can expect the original bond form by mail and request copies via fax or email.
As always, we’re here for you, should you have any questions or experience difficulties with your application. Just call us at 866.450.3412.