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How much does a New York automobile broker bond cost?
If you purchase, arrange, or assist in the purchase of automobiles for consumers, the New York Department of State’s Division of Licensing Services requires you to get a $100,000 surety bond issued on form DOS-1536. The cost of a New York automobile broker bond is a percentage of the total bond amount and is subject to underwriting, meaning you must submit an application to find out exactly how much you’ll pay. Highly qualified applicants are typically approved to pay 1-3% of the total bond amount.
What’s the difference between an automobile broker and a motor vehicle dealer?
The difference between an automobile broker and a motor vehicle dealer is that an automobile broker is the intermediary or middleman between the dealer and the consumer and a dealer is the entity buying and selling vehicles either directly to the consumer or through an automobile broker. If a consumer decides not to work directly with a vehicle dealer when buying a new or used car, they can go through a broker who charges a fee to help facilitate the sale between the buyer and the seller.
Are you a motor vehicle dealer in New York needing to get bonded? Visit our New York motor vehicle dealer bond page for information on cost, licensing, and bonding requirements.
Why are automobile brokers bonded?
Automobile brokers are bonded to guarantee they will conduct faithful and honest business in accordance with all applicable state laws. Because an automobile broker acts as an intermediary between retail customers and dealerships for a fee, there is a risk unscrupulous brokers may not always act in the best interest of their customer. A surety bond is required by the obligee to ensure money is available for any damages occuring as a result of an automobile broker failing to adhere to the rules, especially Article 35-B of the New York General Business Law.
Have any questions about surety bonds for automobile brokers? Get in touch with a bond expert today! Fill out a bond request or call 1 (800) 308-4358.
How long are automobile broker bonds effective?
Automobile broker bonds are effective for twelve months and must be renewed each year for as long as the broker wishes to keep their license active. The Division of Licensing Services may revoke the license if it is not renewed on time, meaning the automobile broker would have to start the licensing process from the beginning.
Can my bond be canceled?
Automobile broker bonds can be canceled at any time by the surety company. However, section 740-a requires the surety to provide the Division with 60 days’ written notice prior to the proposed cancellation date.
How to get a New York automobile broker license
To get a New York automobile broker license, applicants must submit their $100,000 surety bond to the Department of State and they must submit a completed application to the Department of Motor Vehicles. The application must be submitted on form VS-1AB and must include payment of the $37.50 application fee and the $450 registration fee before the applicant can get a license.
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