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Learn more about Washington auto dealer bonds, and apply today. Absolute Surety offers surety bonds nationwide through a convenient online application system.
What Are They?
To become licensed as an auto dealer in Washington, you’ll need to purchase a Washington auto dealer bond. This is a type of license and permit bond that is one of the requirements for licensing in the state of Washington.
There must be a valid, current bond in place at all times to avoid revocation of your dealer’s license. The purpose of these bonds is to ensure that auto dealers operate within the law and that consumers don’t lose out financially as a result of an auto dealer’s unlawful or unethical behavior.
There are two categories of motor vehicle dealer bonds in Washington. A $30,000 bond is required for licensing as a motor vehicle dealer or wholesaler, or as a dealer of manufactured homes and travel trailers. Dealers who sell motorcycles and other miscellaneous vehicles other than those in the first category must obtain a bond in the amount of $5,000.
The party requiring the bond is the Washington State Department of Licensing. The owner of the dealership is the party required to purchase the bond, and the surety is the company that underwrites and issues the bond.
The dealer bond is the dealer’s pledge to abide by the terms and conditions of the bond, which obligate the dealer to comply with all applicable rules and regulations. Breaking that pledge can result in a claim being filed against the bond. Anyone who suffers a financial loss as a consequence of the dealer’s actions can file a claim.
The surety will investigate any claim to determine its legitimacy. After finding a claim valid, the surety will pay it. This payment is essentially an advance on behalf of the dealer, who must subsequently reimburse the surety. The surety is protected against financial liability by the indemnity clause included in every surety bond contract. Financial responsibility for all claims against the bond ultimately belongs to the dealer alone.
The premium cost to the dealer is calculated by multiplying the required bond by the annual premium rate. The premium rate is a percentage based on the dealer’s personal credit score and other factors, including the dealer’s personal and business financials, business experience, and reputation.
You can expect to pay anywhere between 1% to 5% of the bond penalty amount if you maintain good credit. For individuals with lower credit ratings, we can still offer the most competitive premiums with financing sometimes being an option.
After you receive your vehicle dealer bond from Absolute Surety, you will need to file it along with the attached power of attorney with:
Washington State Department of Licensing
Business Licensing Service
Department of Licensing
P O Box 9034
Olympia, WA 98507
We’ll gladly answer any questions you may have about Washington motor vehicle dealer bonds and will work to get you the best premium rate possible.