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Indiana Auto Dealer Bond

Complete Guide to Bonding a Car Dealership

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What is an Indiana auto dealer bond?

If you wish to open a car dealership in the state of Indiana, it’s important to understand the dealer bond requirement. In short, it is a surety bond agreement between three sides: the dealer (principal), the state (obligee), and a surety (a bonding company).

The purpose of the auto dealer bond (also known as vehicle merchandising bond) is to act as insurance for the dealership’s clients and the state. If a dealer engages in a fraudulent or unethical business behavior this breaches the bond agreement and can trigger a claim.

Here is the bonding requirement for dealers in Indiana in a nutshell:

Bond Name: Indiana Vehicle Merchandising Bond
Bond Amount: $25,000
Obligee: Indiana Secretary of State Dealer Division
Indiana Government Center South
302 W Washington Street, Room E018
Indianapolis, IN 46204
Bond Amount: $25,000
Expiration Date: 1 year from the effective date

Ready to apply? You can start your online application by clicking on the button above or read on for some frequently asked questions about auto dealer bonds. If you need any assistance, do not hesitate to call us at (877)-514-5146.

Frequently Asked Questions

Who needs to purchase an Indiana auto dealer bond?

The vehicle merchandising bond requirement extends beyond retail dealerships. A variety of professionals in the automotive industry also need to obtain the bond, such as:

  • Wholesale dealers
  • Transfer dealers
  • Distributors
  • Auctioneers
  • Manufacturers and converter manufacturers
  • Factory manufacturers

How much does an Indiana auto dealer bond cost?

The cost of your bond depends mostly on your credit score, in addition to other factors such as your financial liquidity and industry experience. Applicants with good credit generally pay premiums between 1% and 3% of the bond amount.

Surety Bond Cost by Credit Score
Surety Bond Name Surety Bond Amount Above 700 Between 650-699 Between 600-649 Below 599
Indiana Vehicle Merchandising Bond $25,000 $188-$375 $250-$750 $625-$1,250 $1,250-$2,500

Visit our What Does a Surety Bond Cost? page for more information on how you can estimate your bond cost and save money.

Can I get a dealer bond with bad credit?

Getting bonded with bad credit is a bit more complicated, due to the higher risk involved for sureties. For this reason they ask for higher premiums, in the range of 4% to 10%.

Our bad credit surety bonds program helps applicants with all kinds of credit issues get bonded. The only exceptions are applicants with late child support payments and open bankruptcies. With us, you’ll always get the same trusted bonds from the best surety companies.

How does the bonding process work?

Applying for your vehicle merchandising bond is fast and secure with our online application. Once you fill it out, you’ll receive a free bond quote instantly. If you choose to proceed, one of our agents will contact you and give you an indemnity agreement to sign.

Upon payment, you can expect your dealer bond to be ready within 1 to 2 business days. We will send the original in the mail, but you can request copies for your personal records via fax or email.

How do I renew my vehicle merchandising bond?

The Indiana auto dealer bond is valid for 1 year from the effective date listed on the bond. It needs to be renewed yearly if you wish to maintain your dealer license.

The renewal process is also pretty straightforward, and doesn’t involve much beyond paying your renewal quote. If you improve your credit score or financials over the year, your renewal premium will be lower next time around.

How do I apply for an Indiana dealer license?

Once you have satisfied the bonding requirement, there are a number of other steps to fulfill, so you can send your dealer application. These include:

  • Obtaining liability insurance
  • Pass a background check
  • Have an established place of business
  • Pay applicable fees

There are numerous other licensing requirement which will also depend on the license type you wish to obtain so be sure to check the website of the Auto Dealer Services Division.

What happens if there is a claim against my dealership?

Bond claims are something you should avoid at all costs. It’s important to be up-to-date on all laws and regulations affecting the dealership industry both on a local, state and federal level. The same is true for your salespeople.

So what happens if someone still decides to file a claim? You need to keep all communication with the claimant well-documented, so you can build a case in court. If the surety believes you are not in the wrong, they will help you with legal advice.

Still Have Questions? Check Our FAQ Pages

What Our Clients Have To Say?

Kimberlee Ables
Quick response times and turn around for issuing bonds. Great customer service and very knowledgeable. We have used Lance Surety multiple times and have never been disappointed. Highly recommend them and Collette!
Andrew Poincot
Long story short, these guys cut through the B.S. and get the job done. Responsiveness, excellent! Communication, excellent! Respect for their industry partners, excellent! John, Collette, Ryan, you're all-stars! Thank you!
Margie Martinez
We decided for Lance Surety Bond's quote for 2 reasons; Price and Customer Service. Our Representative Ryan was just SUPERB!! [...] I highly recommend Lance Surety Bond for all your Bonding needs! I'll definitely come back for all of mine. :-) Thanks Ryan!