Used Car Dealer Bond

Fast Approvals - Low Rates - All 50 states!
  • Required by most states as part of the licensing procedure
  • Guarantees compliance with state regulations
  • Each state has a different bond form and required amount
  • Can be used to offer compensation to claimants
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  • Apply Online
    Fill out our online application form.
  • Get Approved Instantly
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Understanding used car dealer bond costs

The cost of your bond is an annual premium, which is a percentage of the total amount required for your used car dealership. Read on for more details.

Total bond amount

The total bond amount sets a cap on the maximum compensation the surety bond can offer. Each state sets their own amount and it can vary from $10,000 (in Alabama) to $100,000 (high-volume dealers in Hawaii).

States use different criteria to determine what the total bond amount will be. Some have fixed amounts for all used car dealers, others determine it based on the dealer’s volume of sales. If a particular state is experiencing a large number of claims, the total amount can be increased to make sure all claimants are adequately compensated.

Bond Premiums

Your used car dealer bond cost is an annual premium, which is a small percentage of the required total amount. Most often the percentage is between 1%-3% if the applicant’s credit score is good or between 3% and 10% for applicants with credit issues. This means the annual cost for a $25,000 used car dealer bond can be as little as $250.

So what does your bond premium depend on? The most important factors are:

  • Your credit score
  • Professional experience and expertise as a dealer
  • Financial strength of your dealership

The bond premium will be cheaper if your business is healthy and well-managed. This means you can also work on reducing the cost by improving your credit score, and including financial statements that prove your liquidity.

You can learn more about your premium with our surety bond cost guide or used the calculator in the sidebar to get an estimate. Of course, your final price will be strictly specific for your case and the best way to find what it will be is to submit our online application.

Used Car Dealer Bond Requirements by State

Below is some state-specific information about used car dealer bond requirements.


As of August 2017, the surety bond amount for used car dealer bonds is increased to $50,000. Dealers who had posted the previous $20,000 or $35,000 bonds will need to renew their bonds with the new amount.


The state of Oklahoma has varying amounts for several types of licensees. Used car dealers need a $25,000 bond, whereas the amount is $50,000 for used car auctioneers and $15,000 for used car rebuilders.


Georgia requires a $35,000 surety bond from used auto dealers and a $10,000 one from dealers of used parts. The former expire on March 31st of even years, while the latter - on December 31st of odd years.


The Special Services Section of the State Police requires used car dealers to provide a $25,000 surety bond before getting licensed.

New York

Currently, used car dealers need to post a $10,000 bond if they sell less than 200 cars per year and a $25,000 bond if they sell more than that.

However, as of March, 2017 the amounts will increase to $20,000 for newly registered used auto dealers. The amount will remain $20,000 in consecutive years if the dealer sells less than 50 vehicles in a year. For sale of more than 50 vehicles the amount will go up to $100,000.


Used car dealers need to post a $25,000 bond to ensure compliance with Chapter 140, Section 58 of the General Laws.

Can I get a used car dealer bond with bad credit?

An applicant with bad credit may have a hard time getting bonded because their credit report issues are perceived as high risk by surety underwriters. Credit issues can mean any of the following:

  • Low credit score
  • No credit history
  • Tax liens
  • Civil judgments
  • Bankruptcies
  • Past due items

If you’re in a similar situation, don’t get disheartened. Bryant Surety Bonds operates a bad credit surety bond program, which allows you to get bonded and start your business even with less-than-perfect credit. We can offer this option because of our exclusive access to top surety companies’ programs. Premiums will vary usually between 3% and 10%.

Why do I need a used car dealer bond?

Before you post a used car dealer bond, it is important to understand the responsibilities it carries. It should not be confused with insurance, which is also a mandatory requirement for used auto dealerships in many states.

This bond provides a safety net for car shoppers and the state in the form of a binding agreement between the dealer, the state and the surety underwriter. In case of known violations, a customer or the state has the right to seek compensation, which can go up to the full amount of the bond.

There are numerous instances of what constitutes a violation of the bond agreement and some of them are state-specific, but here is an overview of common instances that lead to claims against used-car dealers:

  • Odometer tampering, i.e. fraud related to the mileage of the car
  • Hiding the history of the vehicle, also known as title washing
  • Withholding any information that would change the value of the car
  • Not honoring warranties - keep in mind that some states consider oral warranties to be legally binding as well
  • Deceptive advertising - the FTC has guidelines on what constitutes deceptive advertising and you should be well aware of them
  • Financial fraud related to payment plans, leasing and others
  • Withholding information from the state about the sale of a vehicle
  • Not providing a valid title upon selling a vehicle
  • Tax fraud

Used car dealers should always avoid claims and pay any known claims on time. Failure to do so can make it impossible for them to renew their license.

If you are selling new cars, you can check out our auto dealer bond guide as well.