Maybe it’s the steady drumbeat of Toyota recall news. Maybe it’s news such as the recent story of a central New York State car dealer charged with grand larceny after improperly taking customers’ trade-in vehicles, or just the historically poor reputation of used-car dealers. Whatever is driving the change, lawmakers across the nation are looking to increase surety-bond requirements for automobile dealers.
After a local television station in the Raleigh-Durham, NC area did an exposé last December on more than 800 cases of missing vehicle titles statewide, North Carolina lawmakers were entertaining proposals for stiffer state laws regulating car dealers for their upcoming legislative session in May. One possibility under consideration is increasing the state’s existing $50,000 motor vehicle dealer surety-bond requirement to $100,000.
Auto dealer bonds are known by many names–motor vehicle dealer bonds, DMV bonds and MVD bonds are among the most common titles. In some states, more specific titles such as recreation vehicle dealer bond, used motor vehicle dealer bond, or wholesale motor vehicle dealer bond are used.
In several states, laws for vehicle dealers have recently changed. In Indiana, a new law effective last July requires motor vehicle dealers to furnish a $25,000 surety bond. Watercraft and auto-salvage dealers were exempt from the law, which covers all other types of vehicle dealers. Texas and Tennessee both boosted their MVD bond requirement from $25,000 to $50,000 in the past 18 months. California lawmakers have proposed raise the Golden State’s car-dealer bond amount from $50,000 to $100,000.
Because laws change frequently, vehicle dealers would be wise to investigate and make sure they are in compliance with current state law. Learn more about getting bonded from our educational videos, or contact us with your questions. The experts at SuretyBonds.com can help dealers who need a new or renewed bond.
Photo via Flickr user ryantxr