What Is a Louisiana Auto Dealer Bond?
Like all auto dealer bonds, your Louisiana car dealer bond is protection for the state and its citizens, ensuring that your dealership will follow applicable rules.
Just like any other surety bond, your Louisiana auto dealer bond is a three-party contract. Your surety underwrites the bond. The obligee is the state of Louisiana that asks for the bond, and your dealership business is the principal that is required to get bonded.
Why do you need to post the bond? It’s required by the state authority that conducts the licensing of auto dealerships. The bond is a necessary prerequisite for getting your Louisiana auto dealer license.
- Surety Bond Name: Louisiana Auto Dealer Bond
- Surety Bond Amount:
- $20,000 for new vehicle dealers
- $10,000 for new or used motor vehicle facilities
- $50,000 for used vehicle dealers
- Obligee: Louisiana Motor Vehicle Commission
- Required Expiration Date of the Bond: December 31st of each year
Frequently Asked Questions
How much does a Louisiana auto dealer bond cost?
Depending on the type of Louisiana dealer license you need to get, there are different bond amounts you have to provide.
This amount is called the surety bond amount, which is in fact the largest sum you might need to repay on proven claims against your bond.
Your surety bond cost, however, is only a fraction of this amount. It is referred to as the bond premium.
The bond premium percentage is often between 1%-3% for standard bonding market applicants with good credit. With a simple calculation, you can see that your $20,000 can cost as low as $200-$600.
|Surety Bond Cost by Credit Score|
|Type of License||Surety Bond Amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Louisiana new vehicle dealer||$20,000||$150-$300||$200-$600||$500-$1,000||$1,000-$2,000|
|Louisiana new or used motor vehicle facility||$10,000||$100-$150||$100-$300||$250-$500||$500-$1,000|
|Louisiana used vehicle dealer||$50,000||$375-$750||$500-$1,500||$1,250-$2,500||$2,500-$5,000|
How is your exact bond cost set? Your surety examines your personal and business finances to assess your financial stability. It takes into consideration your personal credit score, assets and liquidity, and business know-how. Your bond premium will be lower if these factors are strong.
Can I get a Louisiana auto dealer bond with bad credit?
While it can be difficult to get your Louisiana auto dealer bond if your finances aren’t perfect, Lance Surety Bonds has a solution. We operate our Bad Credit Program to offer bad credit applicants an option to obtain the bond they need.
If you have a low credit score, past tax liens, civil judgments, or bankruptcies, your bond premium will likely be in the range of 5%-10%. The higher rate compensates for the increased risk.
With Lance Surety Bonds, you can be sure you’re getting the top bonding rate on the market. We foster powerful partnerships with multiple A-rated, T-listed surety companies, so we can shop around for the best matching bonding option for your case.
How do I get my Louisiana auto dealer bond?
Your first step to obtaining your Louisiana auto dealer bond is to apply online for a free quote. Once you complete the online application and provide all necessary documents, we will send you the exact bond price.
For any queries you have, don’t hesitate to call us at (877) 514-5146.
Our how to get bonded page explains the bonding process in detail, so you can use it as a reference too.
How do I renew my Louisiana auto dealer bond?
To keep your Louisiana dealer license active, you need to have your bond in force at all times. This means that when you renew your license, you need to also renew your Louisiana auto dealer bond.
Getting bonded with Lance Surety Bonds comes with a special benefit: you’ll get a renewal reminder months in advance. This way, you won’t miss the deadline because you’ll have plenty of time for conducting the renewal.
Don’t forget that you can lower your bond cost every time you renew the bond. As your finances change, the bond premium can be brought down.
How do I get my Louisiana auto dealer license?
Obtaining your Louisiana dealer license is a rigorous process. You need to present a number of documents on top of the dealer bond, such as zoning permits, business location documents, insurance, and payment of license fees, among others. This is how the Louisiana Motor Vehicle Commission ensures you meet the rules set forth in the Louisiana Revised Statutes on Motor Vehicles.
How are bond claims handled for auto dealer bonds?
Since your Louisiana auto dealer bond does not protect your business as insurance does, you need to be aware of possible bond claims.
In case your dealership transgresses state rules, a bond claim can be made on your bond by a harmed party. If proven, they will receive compensation up to the surety bond amount. Your surety covers this at first, but you need to fully reimburse it later.
Surety bond claims are a serious threat to your business, both financially and in terms of reputation. The best course of action is to avoid them at all times.