New Iowa Legislation Changes Bond Requirements for Travel Trailer Dealers

New Legislation Changes Bond Requirement for Travel Trailer Dealers

Two new pieces of legislation passed in Iowa will change travel trailer dealer license requirements. On May 1, 2019, Iowa House Bill 391 was signed into law, raising the surety bond requirement for travel trailer dealers from $25,000 to $75,000. As of July 1, 2019, travel trailer dealers must submit a $75,000 surety bond along with their dealer license application to the Iowa Department of Transportation

Following House Bill 39, Iowa Senate Bill 435 was signed into law. This bill expands the state’s requirements for licensing and bonding to all dealers selling recreational vehicles that are towed on a trailer. By January 1, 2020, all motor vehicle manufacturers, distributors, wholesalers, and dealers must be licensed by the state in accordance with the act.

Who needs a travel trailer license? 

Any businesses selling towable recreational vehicles must have a travel trailer license. According to Iowa Senate Bill 435, a towable recreational vehicle is designed to be towed by another vehicle and used for recreational, camping, or travel use. Examples of towable recreational vehicles include:

  • Travel trailers
  • Toy-hauler trailers
  • Fifth wheel travel trailers
  • Folding camping trailers
  • Truck campers
  • Park model recreational vehicles

According to the bill, being a licensed dealer means the business meets all requirements for authorization to sell and service towable recreational vehicles in the state of Iowa. 

How do I get a travel trailer license? 

Any business in Iowa selling towable recreational vehicles needs to have a manufacturer-dealer agreement with the distributor providing them with vehicles. The agreement outlines the rights and responsibilities of the distributor and the dealer. 

In addition to the agreement and a surety bond in the amount of $75,000, applicants for a travel trailer license must provide the following:

  • Proof their place of business complies with zoning laws in their city
  • Proof of a contract with their trailer manufacturer 
  • Extension licenses for any additional lots that they may have outside of their primary place of business 
  • Proof of at least $100,000 in liability insurance for the business

Applicants will also have to pay a $70 registration fee, a $70 license fee, and a fee of $40 per dealer plate for each travel trailer.

An Iowa travel trailer dealer license expires on December 31 of even-numbered years, meaning it will need to be renewed biennially. The travel trailer license application and fee forms are available on the Department of Transportation’s website.

What if I already have a travel trailer license? 

Current holders of a travel trailer dealer license will need to increase their bond amount by December 31, 2020. The Iowa Department of Transportation will accept a rider on an existing $25,000 bond to raise the amount to $75,000. When the bond amount is increased, applicants may be approved for the same rate, but the premium they pay will increase. For example, a trailer dealer with a $25,000 bond who is approved to pay 1% of the total bond amount—i.e., $250—may still be approved at 1% after the increase, but the actual premium they must pay for the $75,000 bond is $750.

By increasing the required bond amount, travel trailer dealers are held to the same standards as other vehicle dealers in the state of Iowa. A surety bond is required for auto and travel trailer dealers to ensure financial protection is available for customers due to any fraudulent behavior on the part of the licensee.

Do you need a travel trailer surety bond? 

Our team of experts at SuretyBonds.com are ready to help and licensed to issue surety bonds nationwide. For a free, no obligation quote on your surety bond, visit SuretyBonds.com or call today at 1 (800) 308-4358

About the Author

Mel Frieders
Mel is a junior at the University of Missouri - Columbia studying Journalism with an emphasis on strategic communications. She is a marketing intern for SuretyBonds.com, a leading provider of online bonding for clients nationwide.