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Motor Vehicle Dealer Bond: Requirements and Rates by State

What a Motor Vehicle Dealer Bond Is

A Motor Vehicle Dealer Bond is a surety bond every state DMV requires before it will issue an auto dealer license. The bond guarantees you follow state dealer laws — accurate title transfers, honest odometer readings, correct sales tax collection, and truthful advertising. If you break those rules and a customer files a claim, the surety pays the customer up to the bond amount, and you repay the surety.

It is not insurance for you. It is a financial guarantee to the state and to your customers.

Not sure how motor vehicle dealer bonds work? See our national Motor Vehicle Dealer Bond guide for bond amounts, rates by credit tier, and DMV filing steps for all 50 states. 

Who Needs One

You need a motor vehicle dealer bond if you sell more than the state’s threshold of vehicles per year (usually 3-5). This applies to:

  • New car dealers
  • Used car dealers
  • Wholesale dealers and auto auctions
  • Motorcycle, RV, and mobile home dealers (bond amounts vary)
  • Broker or franchise dealers
  • Salvage and rebuilt-title dealers

Curbstoning — selling cars without a license — carries fines from $1,000 to $25,000 per vehicle in most states, plus criminal charges in some. If you sell more than the threshold, you need the license and the bond.

Bond Amounts by State

Most states require between $10,000 and $75,000. A handful set higher amounts for franchise dealers or specific vehicle types.

State Bond amount Dealer type
Florida $25,000 Independent / franchise
Texas $50,000 (GDN) / $25,000 (wholesale) All dealer types
California $50,000 (new/used); $10,000 (motorcycle) Varies by license class
Kansas $30,000 Used / new
Missouri $50,000 Used / new / motorcycle
Georgia $35,000 Used
Ohio $50,000 All
Kentucky $25,000 All
New Jersey $10,000 All
Illinois $50,000 All + designated agent
Wisconsin $50,000 All
Michigan $10,000 All (dealer license + bond)
Alabama $50,000 New
Louisiana $20,000 (new) New / used / specialty
Oregon $50,000 (motor vehicle) All
Arizona $100,000 (new) / $25,000 (wholesale) Class-based
Alaska $25,000 All
Nevada $50,000 Rebuilder / lessor / dealer
North Carolina $50,000 All
New York $25,000 All

Full state-by-state directory below.

What It Costs

The premium — what you actually pay — is a percentage of the bond amount, set by the surety based on your personal credit score.

Personal FICO Premium rate On a $25,000 bond On a $50,000 bond
700+ 1% – 1.5% $250 – $375 $500 – $750
650 – 699 1.5% – 3% $375 – $750 $750 – $1,500
600 – 649 3% – 5% $750 – $1,250 $1,500 – $2,500
550 – 599 5% – 10% $1,250 – $2,500 $2,500 – $5,000
Below 550 10% – 15% $2,500 – $3,750 $5,000 – $7,500

The rate is annual. The bond term is one, two, or three years depending on your state — most are annual with automatic renewal.

Bad credit does not disqualify you. We approve dealers down to 500 FICO through bad-credit surety programs, though the premium will be higher.

How To Get Your Bond

  1. Confirm the exact bond amount and form with your state DMV or dealer licensing office. Some states have a single form; some vary by dealer class.
  2. Apply online — takes about 5 minutes. You provide business info, personal info, and consent to a soft credit pull.
  3. Get your quote — same day for most dealers, often within an hour during business hours.
  4. Pay and receive the executed bond form — we email a signed and sealed PDF, or ship the original if your state requires wet-ink.
  5. File the bond with the DMV as part of your dealer license application or renewal.

Renewal happens automatically each term. Rates can drop as your credit improves and you accumulate claims-free years.

What Happens if Someone Files a Claim

If a customer or the state claims you violated dealer laws — falsified a title, misrepresented odometer miles, failed to remit sales tax, sold a lemon fraudulently — they file with the surety. The surety investigates, and if valid, pays the customer up to the bond amount. You then reimburse the surety in full.

Claims typically drop your credit rating with the surety and can raise your renewal premium 25-100%. Repeated claims can make you uninsurable, which ends your dealer license.

The best protection: keep clean records, disclose known defects, and never alter a title or odometer reading.

Frequently Asked Questions

How fast can I get a motor vehicle dealer bond?

Same day for most applications submitted before 3 PM Central. Complex cases (high bond amounts, credit issues, prior claims) take 1-3 business days.

Do I need a bond in every state I sell in?

You need a bond in every state where you hold a dealer license. Wholesale dealers who cross state lines typically need only their home-state license and bond.

What credit score is needed for a motor vehicle dealer bond?

There is no minimum. Standard-market underwriting starts around 650 FICO. Below that, bad-credit programs apply — premium is higher but approval is available for most applicants.

Can I get a bond with bad credit or a bankruptcy?

Yes. Bad-credit and post-bankruptcy programs approve dealers down to 500 FICO. Expect 5-15% premium instead of the standard 1-3%.

What is the difference between an auto dealer bond and a car dealer bond?

None. “Auto dealer bond,” “car dealer bond,” “motor vehicle dealer bond,” “DMV bond,” and “dealer surety bond” all refer to the same license bond.

How long does the bond last?

Term matches your state license — one, two, or three years. Most states are annual with automatic renewal.

What if my state requires a wet-ink original?

We ship overnight at no extra cost when the state DMV requires a wet-signed original bond form.

State directory — get the bond form for your state

Southeast

Midwest

West

Northeast

Other jurisdictions

Don’t see your state? Call (913) 214-8344 — we write dealer bonds in all 50 states.

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Same-day approval for most dealers. No obligation. Bad credit accepted.

Or call (913) 214-8344 to speak with a licensed surety specialist.