What is a Florida Auto Dealer Bond?
You have probably encountered this type of surety bond on your checklist of requirements for getting a Florida dealer license.
A Florida auto dealer bond (also known as a MVD bond), like auto dealer bonds in all other states, is a mandatory requirement, set in place to protect car buyers. It also guarantees the state that you will run your business in accordance with state and federal laws that apply to car dealerships.
Like other bonds, a Florida auto dealer bond is a three-party agreement between: a principal (your dealership), an obligee (the state of Florida) and a surety bond company, which underwrites the bond and backs the agreement. In case of a violation on your part, a claim can be filed against your dealership, using the auto dealer bond as a foundation.
Here’s a quick overview of the Florida auto dealer bond requirement:
Surety Bond Name: Florida Motor Vehicle Dealer Bond
Surety Bond Amount: $25,000
Obligee: State of Florida
Department of Highway Safety and Motor Vehicles 2900 Apalachee Parkway
Tallahassee, Florida 32399-0500
Expiration Date of the Bond: April 30th each year
You can apply online now for your Florida auto dealer bond. Looking for more information? Consult the Questions section below.
Questions about Auto Dealer Bonds in Florida
What’s the cost of a Florida auto dealer bond?
When calculating surety bond costs, you need to know two numbers. The first one, called the total bond amount, is the maximum penal sum up to which you may have to compensate a claimant in case of a successful claim. The bond premium, on the other hand, is the percentage of the total bond amount you pay, in exchange for obtaining the auto dealer bond. This means your actual surety bond cost, the premium, is a small percentage of the total bond amount.
The bond premium is calculated based on several factors about you and your business, but the most important factor is your personal credit score. Applicants with good credit typically pay no more than 3% of the total bond amount.
|Surety Bond Cost Based on Credit Score|
|Surety Bond Name||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Florida Motor Vehicle Dealer Bond||$25,000||$188-$375||$250-$750||$625-$1,250||$1,250-$2,500|
Other factors that can come into play in determining the premium for your Florida auto dealer bond are your personal and business financials, your assets and liquidity, as well as your industry experience.
For a more detailed explanation, make sure to check out our “Surety Bond Cost” page.
Can I get a Florida auto dealer bond if I have bad credit?
Bad credit bonding is a bit trickier, as the surety underwriter considers auto dealers with bad credit to be a higher risk.
Fortunately, it’s still possible to obtain your auto dealer bond, but to compensate for the risk, sureties will raise your premium. Bad credit applicants usually pay premiums between 5% and 15%. Lance Surety Bonds works with more than 20 A-rated and T-listed sureties, so we are committed to helping you obtain a Florida auto dealer license, regardless of your credit score.
How do I get a Florida auto dealer bond?
Now that you understand the costs associated with obtaining your surety bond, the next step is to apply. Use our straightforward online application to submit your request, and receive approval in just minutes.
If you have more questions or encounter any difficulties, our surety bonds experts are here to help you– just call us at (877) 514-5146.
If you want to learn more about the process of obtaining an auto dealer bond, read our “How to Get Bonded” page.
How do I renew my Florida auto dealer bond?
As we mentioned in the beginning of the article, dealer bonds in Florida need to be renewed annually before April 30th. If you want to keep your Florida dealer license, you will need to renew the bond as well.
We send out bond renewal reminders well ahead of the expiration date of your bond, to make sure you never miss a deadline. If you’re pressed for time we can email or fax you your auto dealer bond, as soon as it is signed by the surety bond company.
Bond renewal quotes can be different from year to year, if there is a change in your personal credit score or financial status. This means that with good finances, your premium may go down from one year to the next.
How do I get a Florida dealer license?
Obtaining an auto dealer bond is just one of the requirements you need to fulfill before getting licensed in Florida.
You also need to have an approved business location, obtain a sales tax numbers, submit fingerprints and attend a pre-licensing course at an approved institution. For a full list of auto dealer licensing requirements in Florida, check out the website of the Department of Highway Safety and Motor Vehicles.
What happens if someone files a claim?
Florida auto dealer bonds are there to protect your customers, so using fraudulent practices or violating the bond agreement in some way can cause you to have a claim filed against you.
If the claim is valid you may be ordered to pay up to $25,000 in compensation, so it’s highly advisable to avoid claim at all costs. Not only do they cost you money, but they hurt your reputation, and make it harder to get your next auto dealer bond.