2017 is here and spring is quickly approaching, which means Florida auto dealers will need to renew their surety bond. These bonds expire annually on April 30, 2017, and must be renewed on or before that date.
What do Florida auto dealer surety bonds do?
Almost every state requires auto dealers to become licensed and many require the purchase of a surety bond. The surety bond ensures that auto dealers adhere to Florida law—if they don’t, and cause damages to customers, the surety bond provides an option for customers to seek reimbursement. Every Florida motor vehicle dealer purchases the same surety bond, on a form provided by the state Department of Highway Safety and Motor Vehicles (DHSMV) and is expected to adhere to the same laws.
Florida auto dealers should comply with the Motor Vehicle, Mobile Home, and Recreational Vehicle Dealer’s Handbook, a comprehensive look at the industry’s regulations. These laws are also detailed in Chapters 319 and 320 of the Florida Statutes.
It’s important to keep your auto dealer surety bond up-to-date so that you’re in compliance with licensing regulations. Penalties for selling cars without a license include up to six months in jail and/or $500 in fines. Further violations can incur penalties of up to $5,000 per violation.
How to get a Florida auto dealer license
Any person selling three or more cars in a 12-month period must be a licensed auto dealer. Florida allows dealers to be licensed under one of several categories:
- Independent dealer—sells used motor vehicles only, retail or wholesale
- Franchise dealer—sells new vehicles under manufacturer agreement; can sell used vehicles
- Service facility—does not sell vehicles; performs services as detailed under Section 320.60 (16) of the Florida Statutes
- Wholesale dealer—may only buy, sell or deal at wholesale
- Auctions—licensed to sell through the bid process
- Salvage—may deal in salvage or wrecked vehicles; cannot sell rebuilt salvage or wrecked vehicles without independent dealer’s license
Would-be auto dealers should not apply until their location has been approved by a Division of Motorist Services Regional Office, and that approval must be submitted with the application. All dealers are required to submit the following information to the DHSMV:
- Completed application
- $300 fee per business location
- $25,000 surety bond or letter of credit
- Copy of lease or proof of ownership of business location
- Dealer training course completion certificate from a DHSMV-approved Dealer Training school
- Copy of registration of business or trade name filed with the Secretary of State
- Copy of corporate papers, corporate meeting minutes showing the election of corporate directors; articles of incorporation if the dealership is a corporation or incorporation; articles of organization and operating agreement if the dealership is an LLC; or a partnership agreement if the dealership is a partnership
- Sales tax number
- Federal employer identification number
- Fingerprints and fees ($54.25 per person)
Independent, auction, wholesale and salvage dealers can submit either of the following:
- Garage liability insurance certification including, at a minimum, $25,000 combined single-limit liability coverage including bodily injury and property damage protection and $10,000 personal injury protection
- General liability insurance paired with a business automobile policy including, at a minimum, $25,000 combined single-limit liability coverage including bodily injury and property damage protection and $10,000 personal injury protection
Franchise dealers must submit the garage liability insurance certification. The Florida motor vehicle dealer application contains an extensive checklist applicants should thoroughly review before final submission.
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Don’t put your license in jeopardy! Call SuretyBonds.com at 1 (800) 308-4358 or email [email protected] and get your bond renewed today.