What is an Idaho auto dealer bond?
An Idaho auto dealer bond is an important regulatory requirement that exists to protect car buyers. It’s impossible to apply for an Idaho dealer license without obtaining an auto dealer bond.
Auto dealer bonds are a type of surety bonds. They represent an agreement between the dealer, the state, and a bonding company, respectively called the principal, the obligee and the surety. The bonding company evaluates the applicant, and underwrites the auto dealer bond, which means it vouches for the dealer’s financial stability and trustworthiness.
If a dealership violates the terms of the auto dealer bond, they can be liable for any loss that results from their actions. A bond claim is always detrimental to a dealership, so every dealer should be careful to always follow the Idaho statutes regulating their business.
Let’s take a look at the Idaho auto dealer bond requirement:
Surety Bond Name: Idaho Motor Vehicle Dealer Bond
Surety Bond Amount: $40,000 for wholesale dealers
$20,000 for retail dealers
$10,000 for dealers of motorcycles, ATVs, UTVs and snowmobiles
Obligee: Dealer Services
Idaho Transportation Department
PO Box 34
Boise ID 83731-0034
Expiration Date: Must be renewed along with the dealer license
Ready to apply for your Idaho auto dealer bond? Click on the Apply Now button on your right to start your application. For more information, have a look at the Questions section below.
Questions about Auto Dealer Bonds in Idaho
How much does an Idaho auto dealer bond cost?
Depending on several factors, the price you will pay for your dealer bond will vary. First, you need to know what the required total bond amount is for the type of license you will get. For example, if you’re a retail dealer, this means you need to secure a $20,000 auto dealer bond.
However, the $20,000 amount refers to the maximum coverage that can be extended to claimants, not the sum required upfront from dealers. Instead, you can think of a surety bond as a line of credit given to your dealership by the bonding company. In exchange for that, the bonding company receives an annual premium from you. This premium is only a few percentage points of the total bond amount.
Your premium is most strongly determined by your personal credit score.
|Surety Bond Cost Based on Credit Score|
|Surety Bond Name||Surety Bond Amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Dealers of motorcycles, ATVs, UTVs and snowmobiles||$10,000||$100-$150||$100-$300||$250-$500||$500-$1,000|
If you want to include other factors in your application, you can. For example, demonstrating strong financials, or that you have a number of years experience in the industry, can certainly help in reducing your premium.
Our What Does a Surety Bond Cost? page contains more valuable information on the topic of bonding costs.
Are bad credit auto dealer bonds available in Idaho?
Luckily, the answer is yes. We have a bad credit surety bonds program, especially designed to help our clients who have bad credit or are experiencing other credit issues, such as tax liens or civil judgments.
Since bonding companies assume a higher risk when underwriting bad credit surety bonds, they request higher premiums: in the range of 5% to 10% of the total bond amount. Still, taking steps to increase your credit score or improve your financials can reduce your premiums when bond renewal is due.
How can I get an Idaho auto dealer bond?
Applying for you Idaho auto dealer bond is actually an easy and straightforward process. You can apply online on our website and you’ll receive your free bond quote instantly.
Once you supply the necessary documentation and pay for your bond, it normally takes 1-2 business days to issue your dealer bond. For any questions, do not hesitate to turn to our surety bond experts for help at (877) 514-5146.
How do I renew my Idaho auto dealer bond?
As mentioned, your auto dealer bond needs to be renewed and maintained for as long as you wish to be a licensed dealer in Idaho. Bond renewal, however, is not complicated.
If you are a client of Lance Surety Bonds, we’ll send you a bond renewal reminder well ahead of the deadline. Paying your bond renewal quote is pretty much all you need to do. You can also talk to one of our agents if you wish to take steps to reduce your premium.
How do I get an Idaho dealer license?
A complete list of all other requirements for obtaining an Idaho dealer license are available on the website of the Idaho Transportation Department.
As a standard procedure, you will have to get a zoning approval, have your business location inspected, buy liability insurance, get a seller permit number, and pay applicable fees, among other requirements.
If you have a used-only or wholesale-only dealership, at least one of the owners need to pass a mandatory 8-hour dealer training course. Another 4-hour requirement for annual continuing education must be met when you apply for a license renewal.
How are bond claims handled for Idaho auto dealer bonds?
As we said in the beginning, the purpose of the auto dealer bond is to protect car buyers in the state. A dealership that engages in unethical business practices or violates the bond agreement in other ways, may be faced with a claim.
The rule of thumb in a situation like this is to settle the claim out of court. Bond claims hurt your reputation and make it harder for you to get bonded. Furthermore, they can end up costing you more than a simple settlement.
If a claim is inevitable, you should keep up-to-date documentation of your communication with the claimant, so you can build a strong case in court.
Still have questions about Idaho auto dealer bonds? Call us at (877) 514-5146 and let us know how we can help!