What is an Iowa motor vehicle dealer bond?
The motor vehicle dealer bond, also known as an auto dealer bond, is a regulatory requirement that exist in all 50 states, albeit with some variations from state to state.
If you want to get your dealership licensed, you will need to post this type of surety bond. As with other surety bonds, the purpose of the Iowa motor vehicle dealer bond is to protect the public– in this case, car buyers. If a dealership is involved in fraudulent business practices, they can trigger a claim against the bond.
In cases of valid claims, you may owe financial compensation to clients, so it’s best to avoid claims as much as you can.
Here is an overview of the bonding requirement in Iowa:
Bond Name: Iowa Motor Vehicle Dealer Bond
Bond Amount: $75,000
Obligee: Iowa Department of Transportation
10 Euclid Avenue – Box 9278
Des Moines, IA 50306
Expiration Date: Needs to be renewed along with the license
You can begin our straightforward online application. If you wish to learn more about dealer bonds in the state, check out the Questions section below.
Questions about Surety Bonds in Iowa
How much does an Iowa motor vehicle dealer bond cost?
The cost of your MVD bond depends on two factors: the total bond amount and the premium you pay to get the bond. The total bond amount is the maximum compensation you may owe to claimants if they win a claim against you. For Iowa dealer bonds, this amount is $75,000.
The premium, on the other hand, is just a few percentage points of the total bond amount and is calculated by your bond provider. Bonding companies want to minimize the risk they undertake when underwriting each surety bond, so they consider your personal credit score as an indicator of your likelihood of triggering a claim.
This is why your premium is mostly dependent on your credit score. If you have no credit issues, you may see premiums in the range of 1% to 4%.
|Surety Bond Cost Based on Credit Score|
|Surety Bond Name||Surety Bond Amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Michigan Auto Dealer Bond||$75,000||$562,5-$1,125||$750-$2,250||$1,875-$3,750||$3,750-$7,500|
If you’re interested in the topic of how surety bond premiums are determined, read more on our What Does a Surety Bond Cost? Page.
Are bad credit auto dealer bonds available in Iowa?
Surety bond companies assume a higher risk when bonding bad credit applicants, and in some cases, they may even refuse to bond such applicants. With this obstacle in mind, Lance Surety Bonds has designed an exclusive bad credit surety bonds program to help all of our applicants get bonded.
Thanks to it, and to our A-rated and T-listed partnering sureties, we successfully help 99% of applicants obtain their motor vehicle dealer bond. Bonding companies adjust for the risk they take by offering slightly higher premiums: in the range between 5% and 10%.
How do I get my Iowa motor vehicle dealer bond?
Applying for your motor vehicle dealer bond is very easy. You can do so right away thanks to our 100% secure and straightforward online application. It will take you no more than a few minutes to fill out and submit.
One of our agents will be in touch with you to help you finalize your application. After payment is processed, it usually takes 1 to 2 business days for us to issue your bond. The original bond form will be immediately sent to you by mail, so you can attach it on your application.
We’re always at your disposal if you have any difficulties or questions. Simply call us at (877) 514-5146.
How do I renew my Iowa motor vehicle dealer bond?
Bond renewal is not complicated either. In fact, you will receive a bond renewal quote and once you pay it, the surety bonds agency you work with will take care of the rest.
This is an added benefit to working with Lance Surety Bonds: we will notify you when your deadline is approaching, so you can take care of the requirement in time and not worry about staying compliant.
How do I get an Iowa dealer license?
Once you obtain an Iowa motor vehicle dealer bond, you will have complied with one of the most important requirements for obtaining a dealer license. However, there are a number of other steps you will need to take, which include:
- Get zoning approval
- Have your lot inspected
- Complete 8 hours of dealer training
- Pay licensing fees
You can find a full list of the Iowa dealer licensing requirements on the website of the Department of Transportation.
Remember: at the time of your license renewal, you need to have renewed you Iowa motor vehicle dealer bond as well.
What should I do in case of a bond claim?
Having a bond claim filed against your dealership is never pleasant, though there are steps you can take to mitigate the harm. If you believe there is substance to the claim, it’s best to try and settle it out of court.
Naturally, this is not always possible. In cases where you are in the right, the surety bond company may try to help you fight the claim in court. Keeping your exchanges with the claimant well-documented can also help your case.
To minimize the likelihood of triggering a claim in the first place, make sure you and your staff are current on all regulations pertaining to your industry.
Do you still have questions about Iowa motor vehicle dealer bonds? Call us at (877) 514-5146 and we will gladly help you out!