A Florida surety bond guarantees principal owners and the public that services will be performed with excellence and security. Florida legally requires a variety of contractors and organizations to secure bonds to conduct business across the public service industry. Absolute Surety is a leading Florida bonding company. Apply easily online and take advantage of lowest rates. Browse the most common types of FL surety bonds, or contact us for a full list.
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Certified Auto dealerships operating within the state of Florida must obtain the proper licenses and a $25,000 FL Dealer Bond. This is to ensure the motor vehicle dealership is operating within within the regulations outlined by the Florida Highway Safety and Motor Vehicles Department.
Note that these bonds may also be referred to as Motor Vehicle Dealer (MVD) Bonds, DMV Bonds, Vehicle Dealer Bonds, Car Dealership Bonds, Car Dealer Bonds & Used Car Dealer Bonds.
Florida dealer surety bonds require underwriting and are based on personal credit of all the owners. You can expect to pay anywhere between $165 to $1,250 a year if you maintain good credit. For dealerships with lower credit ratings, we can still offer the most competitive premiums with financing being an option as well to help you purchase the appropriate bond.
The Bond Penalty Amount – $25,000 – This is the only amount of bond that can be provided by law
The Bond Expiration Date– All auto dealer bonds in Florida must expire April 30th of the expiration year of the bond term.
The Bond Term – Either 1 or 2 year options are available.
Choosing the bond terms that are best for your auto dealership is important. Failure to do so could put your business at risk of losing your license and acquiring additional costs and fees.
The State of Florida requires a 30 day cancellation clause on the bond. What this means is that on April 1st of the expiration year, if you have not renewed your surety bond, the insurance company will send you and the Florida Dept. of Highway Safety a cancellation notice at which time you will have 30 days to renew the bond. If you switch insurance companies, the bond will cancel and you will be issued a new original surety bond.
FL dealer bonds are required by the Florida Department of Highway Safety and Motor Vehicles. Any person that is licensed as an Independent motor vehicle dealer (VI), Wholesale motor vehicle dealer (VW), Motor vehicle auction (VA), or a Salvage motor vehicle dealer (SD) must maintain an active dealer surety bond in order to keep their license active. Failure to keep a current bond will result in the loss of your dealer license with the State of Florida.
The Florida Department of Highway Safety and Motor Vehicles (FLHSMV) issues a number of different types of auto dealer licenses through its Bureau of Dealer Services. A state license is required in order to sell new or used automobiles, trucks, recreational vehicles, mobile homes, and other types of vehicles as a distributor, retailer, auctioneer, wholesaler, or salvage dealer.
Whether you operate a dealership as a sole proprietor, partnership, or corporation, you’ll need to be licensed as a dealer if you buy, sell, display for sale, or deal in three or more motor vehicles or one or more mobile homes or recreational vehicles within any 12-month period.
The requirements for obtaining a Florida auto dealer’s license include the submission of several documents in addition to a completed license application. The specific requirements vary somewhat depending on the particular type of license. A dealer selling motor vehicles, recreational vehicles, and/or motor homes will need to submit the following to FLHSMV:
A surety bond serves as a motor vehicle dealer’s guarantee to do business in compliance with all applicable Florida statutes. It helps ensure that dealers operate in a lawful and ethical manner.
When that is not the case, a Florida auto dealer’s bond provides a source of funds for compensating consumers or the state of Florida for any financial loss resulting from the dealer’s unlawful or unethical business practices. Unlike an irrevocable letter of credit, purchasing a surety bond doesn’t tie up a dealer’s funds.
A Florida auto dealer bond is a legally binding contract involving three parties:
The terms of the surety bond agreement specify the statutes the principal must abide by to avoid incurring claims. If the principal commits a violation that causes financial harm to FLHSMV or a consumer, the injured party can file a claim against the bond and be compensated for the loss.
The usual practice is for the surety to go ahead and pay any claim it finds to be valid and then be reimbursed by the principal.
The surety bond certificate the principal submits to FLHSMV represents a line of credit established for the principal by the surety at the time the bond is purchased. The surety pays a claim against the principal’s bond by drawing down that line of credit, which creates a debt that the principal is legally obligated to repay to the surety.
After you receive your auto dealer bond from Absolute Surety, you will need to sign it, submit it with the attached power of attorney to your DMV office (along with other licensing paperwork required for your entity). Please contact your regional office to see whether they will need the original or will accept a copy.
Request an online quote today for the surety bond you’ll need if you want to obtain a Florida auto dealer’s license. Or, call and discuss your surety bond needs with one of our seasoned professionals.
Our representatives working with Independent Dealers (VI), Auction Dealers (VA) and Wholesale Dealers (VW) in Florida can receive their Garage Liability Insurance through our team!
The State of Florida requires a minimum of $25,000 combined single limit policy including bodily injury and property damage and $10,000 PIP. Another option is a general liability policy coupled with a business auto policy which should include a minimum of $25,000 combined single-limit liability coverage including bodily injury and property damage and $10,000 PIP.
You can download a questionnaire here to receive a quote on your Garage Liability Insurance.
**Note that Salvage Dealers (SD) are exempt from garage liability insurance coverage in Florida.
Contact an Absolute Surety Representative to Secure Your Motor Vehicle Dealership Bond Right Now!