New and Used Car Dealer Bond

A new and used car dealer bond is a requirement that all car dealers need to obtain before they can get their car dealer license and open their businesses.
Key Highlights
- These bonds are also referred to as motor vehicle dealer bonds or car dealer bonds.
- New and used car dealer bonds protect customers from any fraudulent or unethical actions by the dealer.
- If an employer is required to have a wage surety bond but doesn't secure one, they may incur fines and penalties.
How do I purchase a new and used car dealer bond?
NFP, the nation's largest and most reliable surety company, is authorized to issue new and used car dealer bonds in each of the 50 states. We can provide the best rates for your bond, as well as the fastest issuance, to get your business off and running.
Our short online application makes it easy. Click below to start the application process today.
New and Used Car Dealer Bond FAQs
A new and used car dealer bond is a type of insurance that all car dealers need to obtain before they can get their car dealer license and open their businesses. Also referred to as a motor vehicle dealer bond or car dealer bond, new and used car dealer bonds protect customers from any fraudulent or unethical actions by the dealer. If a car dealer does not follow rules and regulations, a customer can make a claim on the bond and be reimbursed.
A new and used car dealer bond is required for individuals or businesses seeking to obtain a wholesale motor vehicle dealer license in many U.S. states. This bond is a type of license and permit bond that serves as a financial guarantee to the state and the public that the dealer will operate in compliance with all applicable laws and regulations. Specifically, it is needed by new and used car dealers — those who buy and sell vehicles exclusively to and from other licensed dealers, rather than to the general public. The bond protects against fraudulent or unethical business practices by allowing claims to be filed if the dealer violates state laws. It is typically a prerequisite for licensing and is mandated by the state’s Department of Motor Vehicles or similar authority.
The cost of a new and used car dealer bond varies depending on several factors, primarily the bond amount required by the state and the financial profile of the applicant. The bond amount typically ranges from $10,000 to $150,000, while the premium usually falls between 1 and 10% of the bond amount.
Each situation is different and requires an expert to review your unique situation. Bad credit may not prevent you from obtaining an auto dealer bond but it may influence the cost of your bond.
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