Businesses that buy, sell, broker, or otherwise handle motor vehicle transactions in Vermont must be licensed before conducting sales activity. As part of the licensing process, applicants are required to obtain a Vermont auto dealer bond.
The bond functions as a financial safeguard that ensures dealers follow motor vehicle laws and licensing requirements in the state. If a licensed dealer fails to properly transfer ownership documents, violates sales regulations, or engages in deceptive or unlawful practices, the bond provides protection for consumers and other affected parties.
Dealer licensing and surety bond compliance in Vermont are regulated by the Vermont Agency of Transportation Department of Motor Vehicles. The bond requirement is set out in 23 V.S.A. § 453(g). Vermont is one of the few states that accepts three alternative forms of financial security: a surety bond, an irrevocable letter of credit, or a certificate of deposit issued by an entity authorized to do business in Vermont; most dealers choose the surety bond because it is far more capital-efficient than tying up $20,000–$35,000 in cash collateral.
Vermont Auto Dealer Bond at a Glance
- Purpose: Provides financial protection to consumers and the state when dealers violate Vermont motor vehicle laws
- Who Needs It: Motor vehicle dealers operating in Vermont
- Regulating Authority: Vermont Agency of Transportation Department of Motor Vehicles
- Required Bond Amount: $20,000 – $35,000, based on vehicle sales volume
- Bond Term: 1-year (initial registration) or 2-year (renewal)
- Premium Range: Starting around 1% of the bond amount for well-qualified applicants, 3-10% for applicants with less-than-ideal credit scores.
How Much Does a Vermont Auto Dealer Bond Cost?
Vermont sets dealer bond amounts on a sliding scale tied to vehicle sales volume. The amount is based on the dealer’s sales in the prior year for a 1-year registration, or in the prior two years for a 2-year registration. New applicants — dealers not registered in the immediately preceding year — are assigned the highest bond tier ($35,000) until sales history is established.
Dealers do not pay the full bond amount. Instead, they pay an annual premium representing a percentage of the required coverage.
| Bond Type | Bond Amount | Estimated Annual Cost* |
|---|---|---|
| Dealer selling fewer than 25 vehicles in the prior registration period | $20,000 | Starts at $200 |
| Dealer selling 25–100 vehicles in the prior registration period | $25,000 | Starts at $250 |
| Dealer selling 101–250 vehicles in the prior registration period | $30,000 | Starts at $300 |
| New applicants or dealers selling 251+ vehicles in the prior registration period | $35,000 | Starts at $350 |
*Estimated pricing assumes well-qualified applicants. Final premiums are determined after review.
Bond premiums are determined through underwriting and reflect the applicant's overall risk. Surety providers typically evaluate factors such as credit history, financial stability, available capital, and industry experience when setting rates.
Dealers with strong credit profiles and established business operations often qualify for premiums in the 1%–3% range of the required bond amount. Applicants with average credit or limited operating history commonly receive quotes between 3% and 5%. Dealers with significant credit challenges or higher financial risk may receive higher rates, sometimes as high as 10%, depending on the underwriting review.
Even if you do not meet standard underwriting benchmarks, bonding is still available. Bryant Surety Bonds offers a Bad Credit Surety Bond Program that connects applicants with specialized surety carriers experienced in placing higher-risk accounts, helping many dealers obtain the coverage required for licensing.
Get a quick premium estimate using our Surety Bond Cost Calculator below. Just select your bond type, state, credit range, and required bond amount.
Surety Bond Cost Calculator
Tell us where to send you your FREE estimate
SEND ME MY ESTIMATE!We'll never share your information with third parties
Thank you for your request!
The ballpark estimate on your premium is: $100 - $167
We've sent a copy of your estimate on your email as well.
Want an exact quote? Simply fill out our online application It's fast and 100% free!
Get a free exact quote Get another estimateHow to Get a Vermont Auto Dealer Bond
- Fill out your information:
- Receive your no-obligation quote.
- Get bonded - Once payment is completed, your official Vermont auto dealer bond is issued and prepared for filing with the Vermont DMV.
In many cases, the bonding process can be completed within one business day, helping dealers avoid delays during licensing or renewal.
Bryant Surety Bonds is authorized to issue surety bonds in Vermont (license #3450124) and works with nationally recognized surety providers known for efficient underwriting and dependable turnaround times.
Call us anytime at 866.450.3412 for more information regarding your bond or if you need help with your application.
How Do You Get a Vermont Auto Dealer License?
Obtaining a surety bond is only one step of Vermont’s dealer licensing process. At a high level, applicants typically must:
- Submit a completed dealer license application to the Vermont Department of Motor Vehicles
- File the required motor vehicle dealer surety bond based on annual vehicle sales volume
- Maintain a permanent business location — owned or under lease, with a building of at least 1,200 sq ft used primarily for the dealership, open at least 146 days per calendar year for 6 hours per day with a minimum of 4 hours between 6 AM and 6 PM (the 146-day/6-hour rule does not apply to ATV, snowmobile, or boat dealers), in compliance with local zoning
- Provide proof of automobile liability insurance covering vehicles operated under dealer plates at Vermont’s minimum 25/50/10 limits — $25,000 bodily injury per person, $50,000 bodily injury per accident, and $10,000 property damage per accident.
- Register the business entity with the Vermont Secretary of State (if operating as an LLC, corporation, or partnership)
- Register for sales and use tax with the Vermont Department of Taxes
- Provide ownership disclosures and background information for all principals
- Pay the dealer registration fee — $603 for new or used car/truck dealers (recently increased from $503), which includes 3 free dealer plates; additional plates are $66 each (increased from $55)
- New and used car dealers must also be “engaged in the business”, which Vermont defines as selling at least 12 vehicles per year — this threshold is what the DMV uses to confirm a dealer is actively operating at renewal
For detailed information, visit our Vermont Auto Dealer License Guide.
Vermont Auto Dealer Bond Renewal
Vermont auto dealer bonds are generally tied to the dealer registration cycle — 1 year for an initial registration or 2 years on renewal — and must remain continuously active to keep the dealer certificate valid. A canceled or expired bond can result in license suspension or revocation. Since Vermont sets bond amounts based on vehicle sales volume, dealers may need to increase or modify their bond coverage during renewal. The DMV uses the dealer’s prior-period sales volume to confirm the correct bond tier at each renewal.
Important Updates for Vermont Dealers
Used Vehicle Inspection Disclosure Form (Effective July 1, 2025)
Under Act 165 (Sec. 35, amending 23 V.S.A. § 466), Vermont dealers selling a used vehicle must deliver a written disclosure to the buyer that includes the date of the vehicle’s last official state inspection, the expiration date of that inspection, the buyer’s right to have the vehicle inspected, and a statement that the condition of the vehicle being sold may differ from its condition at the last inspection. Dealers should program the new disclosure form into their sales process before any used vehicle sale closes.
Title Required on All Vehicle Registrations with Ownership Changes (Effective July 1, 2024)
Act 165 (Secs. 26–30) eliminated the prior model-year exemption for titling. Any vehicle registered with an ownership change now receives a Vermont title regardless of model year. Vehicles already exempt from titling remain exempt unless ownership changes. This affects dealer paperwork on every retail sale and trade-in.
Dealer Fee Increases and New EV/PHEV Registration Fees
The Vermont DMV raised dealer fees as part of a broader inflation-driven schedule adjustment: the new/used car dealer registration fee moved from $503 to $603 and the additional dealer plate fee from $55 to $66, with similar 15–20% increases across other dealer categories. Separately, Act 165 (Secs. 36–39) introduced new Electric Vehicle Supply Equipment (EVSE) annual registration fees effective January 1, 2025: $44.50 for plug-in hybrid vehicles and $89.00 for all-electric vehicles, both of which dealers should factor into out-the-door pricing on EV and PHEV sales.
FAQs
Why does Vermont use different bond amounts based on sales volume?
Vermont adjusts bond requirements to reflect the level of dealership activity and potential consumer risk exposure. Higher sales volumes typically require higher bond coverage.
Do new Vermont dealers qualify for the lowest bond tier?
No. New applicants are typically assigned the highest bond tier until sufficient sales history is established.
Can my bond amount decrease if my sales volume drops?
Yes. Dealers may qualify for a lower bond tier during renewal if documented sales activity falls within a lower threshold.
Does the auto dealer bond protect my dealership?
No. The bond protects consumers and the state. If a valid claim is paid, the bonded dealer must reimburse the surety.
Can I transfer my car dealer bond to another business entity?
No. Bonds are issued to a specific licensed business. Changes in ownership or entity structure generally require a new bond filing.
How long does it take to get a Vermont auto dealer bond?
Usually within a single business day. Applicants receive a quote the same day they apply, and once payment is processed the bond is typically issued within 24 hours and ready to file with the Vermont DMV alongside the rest of the dealer registration packet.
Does obtaining an auto dealer bond quote affect my credit score?
It will not. Sureties use a soft credit inquiry to underwrite your application, which has no impact on your credit score and does not show up on the credit reports lenders pull when you finance inventory or apply for other business credit.
Can I get a Vermont auto dealer bond if I have bad credit or past financial issues?
Yes. Bad credit, prior bankruptcies, tax liens, or other financial setbacks do not automatically disqualify you. Through Bryant Surety Bonds’ Bad Credit Surety Bond Program, higher-risk applicants are typically quoted at 5%–10% of the bond amount rather than the standard 1%–3%, and most still secure the coverage they need to obtain or renew their Vermont dealer registration.
Are installment options available for paying my Vermont auto dealer bond premium?
Unfortunately, no. Vermont auto dealer bond premiums are paid in full upfront for the full annual term. For a well-qualified applicant, premiums on the four tiers typically start around $200 ($20,000 bond), $250 ($25,000 bond), $300 ($30,000 bond), and $350 ($35,000 bond), so most operators absorb the premium in a single payment.
Additional Resources
- Vermont Statutes Annotated Title 23 Chapter 007 §453
- Vermont DMV: Dealer Registration Guide
- Vermont DMV: Forms & Manuals
- Vermont DMV: Dealers & Inspection Stations
