What Is a Montana Auto Dealer Bond?
Montana auto dealers have to get licensed with the state Motor Vehicle Division. One of the main requirements you need to meet to be granted the right to operate is to obtain an auto dealer bond.
The bonding functions as an extra protection for the state and your customers. It ensures you will fulfill your legal obligations. If you transgress from the law, affected parties can make a claim against your bond to seek compensation.
As other surety bonds in the state, your dealer bond is a contractual agreement between three entities. Your dealership is the principal who needs the bonding. The obligee is the Motor Vehicle Division. The surety is the third party which provides the bond and backs your business.
Montana Title and Registration Bureau
1003 Buckskin Drive
Deer Lodge, MT 59722
Telephone: (406) 846-6000
Questions about Auto Dealer Bonds in Montana
When do you need to obtain this bond?
If you want to buy, sell or exchange new or used cars, trucks, vans and buses, trailers, motor homes, motorcycles, quadricycles , snowmobiles, special mobile equipment, or new manufactured homes, you have to get a Montana auto dealer license from the state Motor Vehicle Division. The bond amounts vary depending on the license type you want to obtain.
The bond should be renewed annually, before December 31st of each year. A continuation certificate should be obtained before this date to ensure you remain licensed. Dealers can learn more about the licensing requirements here.
How much does it cost to get bonded?
The bond amount you have to post depends on the type of license you need to obtain. Franchise, wholesale, auction, broker and new manufactured home dealers have to post a $50,000 bond.
Franchise dealers who work only with street-legal motorcycles or quadricycles need to get a $15,000 bond. A $5,000 bond is required of franchise dealers selling only snowmobiles, non-street legal motorcycles, and quadricycles and boats.
Whatever your bond amount is, you need to pay only a fraction of it. This is called the bond premium and is typically between 1% and 3% of the required amount. If you need a $50,000 bond, your bond price can be between $500 and $1,500 if you have stable finances.
In fact, your bond cost is directly dependent on your personal and business stats. If you can demonstrate solid credit score, business financials, and assets and liquidity, you can expect to pay less for your bond.
Need more details about the way your bond price is formulated? Don’t forget to check out our thorough surety bond cost page.
|Bond Type||Surety Bond Amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Montana auto dealer bond: franchise, wholesale, auction, broker and new manufactured home dealers||$50,000||$188-$375||$250-$625||$625-$1,250||$1,250-$2,500|
|Franchise dealers - only street-legal motorcycles or quadricycles||$15,000||$112.5-$225||$150-$450||$375-$750||$750-$1,500|
|Franchise dealers - only snowmobiles, non-street legal motorcycles, and quadricycles and boats||$5,000||$100||$100-$150||$125-$250||$250-$500|
Is it possible to get bonded if I have bad credit?
Yes, even if you have a far-from-perfect credit score, you can still get bonded with us. At Lance Surety Bonds, we operate our Bad Credit Surety Bonds program to allow applicants with credit score, tax liens, bankruptcies, and civil judgements obtain the bond they need.
You can expect a bonding rate in the range of 5%-10%, as the bonding risk is higher. We have close partnerships with a number of A-rated, T-listed surety companies, so you are still guaranteed a top price with us.
How do I apply for a bond?
If you want to get an exact bond price, you can complete our full application and sends us your paperwork. We will then be able to assess your profile.
For more information on how bonding works, you can learn more in our How to Get Bonded page.
Need help or have further questions? Don’t hesitate to call us at (877) 514-5146.
What if I get a claim against the bond?
In case you engage in unlawful activities such as misguiding your customers or not providing services due under warranty, you can get a claim on your bond. The purpose of the bond is to protect your customers from any fraud and misuse. If proven, the claim entails that you pay a financial compensation to the harmed parties.
At first, your surety may cover the costs incurred. The maximum reimbursement is the penal sum of your bond, which is $5,000, $15,000 or $50,000 in Montana. However, you have to fully repay the surety soon after. This shows that bond claims are to be avoided as much as possible. They can harm your business financially and in terms of reputation.