New York Auto Dealer Bond Guide
If you are applying to become a motor vehicle dealer in New York, you'll need to purchase a surety bond. Read on to learn all about the bonding process in this guide.
Bond Overview
- Purpose: To protect dealership consumers from financial harm
- Who Needs It: All dealers selling vehicles over 10,000 pounds
- Regulating Body: The New York Commissioner of Motor Vehicles
- Required Amount: $20,000–$100,000, based on vehicles sales volume
- Premium Rates: Credit-based, 0.65–10% of the bond amount
What Is a New York Motor Vehicle Dealer Bond?
New York Vehicle and Traffic Law Section 415(6-b) requires individuals to file a surety bond for the auto dealer license registration process. This bond ensures that auto dealers meet the following obligations:
- Pay all valid bank drafts for customer vehicle purchases
- Transfer valid titles for all vehicles
- Maintain and keep safe customer deposits
- Pay all fines required by the Commissioner of Motor Vehicles
- Repay any overcharges related to vehicle registration and titling
Who Needs a Motor Vehicle Dealer Bond?
Bond requirements vary depending on the New York dealer license type needed:
- $20,000 Bond: Applicants who sold 50 or fewer vehicles in the previous calendar year
- $50,000 Bond: New franchise applicants who sell cars, SUVs, light trucks, etc.
- $100,000 Bond: Applicants who sold more than 50 vehicles in the previous calendar year
Dealers who only sell trailers, motorcycles, ATVs, boats, snowmobiles, or vehicles over 10,000 pounds do not need a surety bond.
Please note this page is for vehicle dealer licensing. If you need to register a vehicle without a title, you need a New York certificate of title bond. If you broker vehicles for consumers, you need a New York automobile broker bond.
How Much Do New York Motor Vehicle Dealer Bonds Cost?
The cost of your New York motor vehicle dealer bond will depend on the bond amount required for your dealer license type and vehicles sold:
- $20,000 Bond: Available for instant purchase at $130
- $50,000 Bond: Subject to underwriting, starting at $350
- $10,000 Bond: Subject to underwriting, starting at $700
If your bond goes through underwriting the cost of your bond will vary on the bond amount and your credit score.
How Does a New York Motor Vehicle Dealer Bond Work?
A New York motor vehicle dealer bond binds three parties in a legal contract:
- Principal: The motor vehicle dealer
- Surety: The provider issuing the bond to the principal
- Obligee: The NYS DMV Bureau of Consumer & Facility Service
By filing this bond, a dealership agrees to follow New York state law when selling or trading vehicles. The bond protects any person — including the state — from financial loss if they've obtained a court judgment against the dealership.
The surety company will pay valid claims up to the full bond amount, which the bonded dealer must then reimburse.
How to Get an Auto Bond in New York
You can apply for your New York auto dealer bond online 24/7 through our safe and secure application portal. You must provide the following information for Department of Motor Vehicles approval:
- Dealer name
- Dealer address
- Type of vehicles to be sold (used or new)
- Number of vehicles sold in the previous year
- Facility number, if an existing dealership
Once your order has been processed, you'll receive your official auto dealer surety bond by email.
If you are purchasing the $20,000 bond, you can buy your bond instantly online. We’ll send your official bond documents via email in minutes which you must file with the DMV.
How to Become a Licensed Motor Vehicle Dealer in New York?
Learn How To Get A New York Auto Dealer License by reviewing our step-by-step guide.
You must submit the following with your dealer license application packet.
- Original facility application
- New York surety bond in the correct amount
- Proof of permission to use the business location
- Sales tax ID and certificate of authority
- Proof of workers' compensation insurance
- Photocopy of government-issued photo ID
- Purchase receipts for your dealer's starter kit and signs
- Check payable to the Commissioner of Motor Vehicles for required fees
- Filing receipt (corporation or LLC) or business certificate (individual using assumed name or partnership)
If the state DMV approves your application, your regional office will contact you to schedule an on-site inspection.
