It’s that time again.

Florida auto dealers are on the hook for a new surety bond by the month’s end. Florida auto dealer bonds provide consumers in the Sunshine State with a degree of protection against fraud or misrepresentation.

These bonds are also a mandatory part of the licensing process by the Florida Department of Highway Safety and Motor Vehicles, which acts as the obligee. These bonds expire on April 30 of each year.

Auto dealer bonds, which are also called MVD bonds or DMV bonds, are currently set at a $25,000 amount in Florida. Obtaining these bonds can prove costly for applicants with poor credit or minimal assets, with high-risk premiums ranging anywhere from 3 percent to 20 percent.

But applicants with good credit and solid assets can typically find a premium in that 1-3% range.

MVD bonds ensure that auto dealers follow applicable laws and regulations.  They also provide a built-in protection for consumers, who can file a claim against an auto dealer bond if the dealership is misrepresenting merchandise or engaging in unethical business practices.

Image: David Hilowitz