Maryland Auto Dealer Bond

Depending on the type of Maryland car dealer license you need, and the number of vehicles you sell, you are required to post a bond between $15,000 and $300,000.

The surety bond amount set by the Maryland Department of Transportation represents the maximum compensation that can be awarded to affected parties, in case there is a proven claim against your dealership.

However, Maryland car dealers are not required to pay the whole amount. You need to cover only a small fraction of it, which is referred to as the bond premium.

The percentages for standard bonding market are between 1% and 3% of the bond amount. A simple calculation shows that for a $50,000 Maryland auto dealer bond, you’ll have to pay between $500 and $1,500.

Your exact bond price is formulated after your surety takes a close look at your overall business situation. It considers your personal credit score, business experience, and business financials, as well as your showcased assets and liquidity. The bond premium you will get is lower when your finances are more stable.

Learn more about how your surety bond cost is set here.

Maryland auto dealers with less-than-stellar credit scores often run into difficulties when trying to get bonded, as many sureties turn down bad credit applicants. At Lance Surety Bonds, we are committed to getting you the Maryland motor vehicle dealer bond you need. That’s why we created our Bad Credit Program.

You can expect bond rates in the range of 5%-10%, to compensate for the riskier nature of the bonding. However, the program is an excellent option for staying in business and improving your credit situation with time.

What’s more, with Lance Surety Bonds you can count on getting the best price offer on your bond. We work with many established A-rated, T-listed surety companies, which enables us to match applicants to the best bonding option for their case.

Apply online today for your free Maryland auto dealer bond quote! Starting your bonding process is very easy and application reviews for dealers are usually quite fast.

You can speak to one of our bonding experts if you have questions about bonding, or your application. Just call us at (877) 514-5146 to get assistance. You can find a detailed explanation of the bonding process here.

Together with renewing your Maryland dealer license biannually, you also need to renew your Maryland auto dealer bond.

The renewal process for Lance Surety Bonds’ clients is simple and straightforward. We will send you a renewal reminder a few months in advance, and will contact you again if needed. This way, you can be sure you won’t miss your opportunity to renew your bond and stay in operation.

Every time you renew your bond, you have the opportunity to lower your surety bond cost. As your financial situation changes over time, if you manage to improve your credit score and other stats, your Maryland car dealer bond premium will go down.

Maryland auto dealers must apply with the Department of Transportation for their license. Along with your completed application and Maryland auto dealer bond, there is a list of other documents that you’re asked to present.

The requirements include submitting zoning approval papers, your criminal background check, a trader’s license copy, a proof of repair facility or contract for such services, and an Electronic Registration and Titling (ERT). The license fee for the two-year licensing period is $500.

Proven claims on your Maryland auto dealer bond are a serious threat to your business’ stability and reputation. That’s why they should be avoided as much as possible.

This is because bonds function in a different way from insurance. They protect your clients and their interests. If you go against them, they can file a claim against you.

The compensation for affected parties can be as high as the penal sum of your bond. Your surety takes care of the reimbursement at first, but shortly afterwards you need to fully repay it, which another good reason to avoid claims.