Auto Dealer Bond
As a visitor to Surety Bonds.com, you are likely aware that the primary purpose of many surety bonds is to protect consumers from fraud, contract default and other wrongful actions done by industries and businesses who provide goods and services directly to the public.
Importance of Bonds
Many types of businesses get bonded, either because it's required for a license or permit or simply to demonstrate they are an ethical and aboveboard company. Contractors, cleaning companies and mortgage brokers are among the many types of businesses who must get bonded. Auto dealers must also be bonded to obtain their auto dealership license.
Protection
The auto dealer bond (also called the motor vehicle dealer bond, the DMV bond, and the used car dealer bond) guarantees compliance with:
- federal laws
- state laws
- local laws
- payment of taxes or judgments (in certain circumstances)
The bond also protects the consumer against fraud or other wrongful actions on behalf of the dealership and its employee(s).
For example, the bond takes effect if the dealership is found to be misrepresenting its merchandise, not forwarding sales tax payments to the state or using unethical business practices to sell vehicles, among a host of other offenses.
Benefits to the Consumer
As a consumer, ensuring that any car dealer you deal with is bonded and licensed is in your best interest. Besides being required by law in most areas, the bond offers you another layer of protection. The bond ensures that a third party (the insurance or bond company) has approved the dealer as being financially stable. You can be assured that the bond company will be able to step in and fix or improve the situation for you should something go wrong during your transaction.
Obtaining a Bond
Dealers generally purchase their bonds through an insurance company or surety bond company. To prove that he or she is financially solvent and can cover any bond premiums and cost, the dealer will be required to fill out an application, submit to a credit check, and provide financial statements.
If a dealer has less-than-stellar credit, obtaining a bond will be more difficult. However, he or she can apply with companies who have special programs for people with sub par credit.
Auto Dealers—Get Bonded on Surety Bonds.com
If you are starting a new auto dealership or are looking for a new partner to help secure your Auto Dealer Surety Bonds, call Surety Bonds.com today and speak with one of our specialists. We have helped hundreds of business owners across the country understand bonding requirements. We'd be happy to help you get bonded today!
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