Used and Wholesale Dealer Bond Mississippi Overview
If you want to become a used or wholesale vehicle dealer in Mississippi, you will need to post a $15,000 auto dealer bond during the application process.
Why do I need a bond?
When you get bonded, you enter into an agreement to comply with all provisions of state law that apply to your business license.
If you violate the law and cause losses to anyone, a claim can be filed by that person against your bond to secure compensation.
The surety that backs the bond then has the obligation to examine the claim and compensate claimants for as much as the full amount of the bond.
To learn more about why you need a bond and how it works, see our ‘What is a surety bond' guide!
In the sections below you can find out more about the cost of your bond, how bond claims occur, and how to apply for your bond.
For any additional questions about getting bonded, call us at (866)-450-3412 anytime!
What's The Cost of Getting a Wholesale or Used Dealer Bond in Mississippi?
To get bonded, you need to pay a surety bond premium. The premium is set by your surety and is equal to a percentage of the total amount of the bond. Your surety will want to review several different aspects of your financials in order to set a premium for you.
How your financials determine your bond rate
When you apply, your surety will first review your personal credit score. Your score is the central and most important factor, as it is considered a reliable indicator of the likelihood of a claim being made against a bond.
If you have a very high to good credit score, you can expect to be offered a premium that's between .75% and 5% of the amount of your bond.
If you have a low credit score, you can expect the surety to offer you a rate between 5% and 10%.
In order to get a better sense of your financials, your surety may also request to review your:
- Personal and business financial statements
- Fixed and liquid assets
- Industry experience
For an overview of the possible cost of your bond, based on your credit score, see the following table.
|Mississippi Used and Wholesale Dealer Bond Cost Based on Credit Score|
|Above 700||650-699||600-649||Below 599|
|Used and wholesale dealer||$15,000||$112-$225||$150-$450||$375-$750||$750-$1,125|
What Can Give Rise to a Claim Against My Bond?
The bond required of used and wholesale dealers in Mississippi under §63-21-13 of the Motor Vehicle Title Act is conditioned on dealers' faithful performance of their obligations as specified in the Act. If a dealer violates their obligations and causes any financial losses to another dealer or member of the public, a claim can be made against their bond.
When a claim is made, the surety that backs the bond must establish whether the claim is legitimate as well as what the appropriate amount of compensation should be. It may extend compensation for as much as the full amount of the bond, if required.
The claims process does not end after claimants have been compensated. Under the bond agreement, the bonded dealer must reimburse the surety because it is the dealer who is liable for the claim, not the surety.
If, instead, a dealer does not violate their bond agreement, then they must only pay their initial premium and have no other costs associated with the bond to cover.
Get Your Bond Here!
To get started with your application, complete and submit the bond form. We will contact you shortly with a free quote on your bond as well as more information about how you can complete the bonding process.
If you have any additional questions about the bond required of used and wholesale dealers in Mississippi, call us at (866)-450-3412!