Motor Vehicle Dealer Bond

Any person wishing to sell motor vehicles is required by the state in which they are operating to obtain a license before they can offer vehicles for sale to the public. This ensures that the state knows who is selling cars and trucks and they can do a background and criminal check on someone before issuing a license. As part of this process, states also require that prospective dealers post a surety bond called a motor vehicle dealer bond. Get one from www.bfbond.com.

These bonds are designed to protect the public from any inappropriate or illegal actions on behalf of the automotive dealer, and the price of a motor vehicle dealer bond will vary from state to state and in amounts that usually begin at around $10,000. In many states, this amount is much higher. For example, in the State of Florida, all motor vehicle dealers in Florida must possess a dealer bond in the amount of $25,000.

The price of a car dealer bond will depend on a number of factors, and surety companies regularly use a point grade system to rate the risk of the dealer and thereby calculate the cost of the premiums. This process normally includes a personal and credit check.  Factors that will increase the premium include:

• the number of credit inquiries
• revolving debt
• utilization percentage of revolving debt

This information is then entered into a database that determines the premium to be charged for a dealer bond like an auto dealer surety bond.

It is very important for consumers to do business with only recognized and licensed automobile dealers. This ensures that a dealer can be trusted to provide truthful information about the vehicles they are selling.  Also, if something turns up later, then the customer has the motor vehicle dealer bond to fall back on.

This is particularly crucial when buying a used or reconditioned motor vehicle. Only the dealer knows the true history of a particular vehicle and whether or not, for example, the odometer is correct. If they are not licensed and do not have a used car dealer bond, then the consumer may be stuck with a lemon instead of the luxury car they thought they were buying. It is always important to check carefully before buying any form of motor vehicle, but one of the first things a smart consumer should look for is a licensed automotive dealer.

Contact us at Bernard Fleischer & Sons to learn more about why dealer insurance is important, whether you are a consumer or an aspiring car dealer.  Our website, at www.bfbond.com, is designed to provide you with accurate and detailed information about the insurance services you may require.

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