What Is a Nebraska Auto Dealer Bond?
In order to operate legally in the state, Nebraska auto dealers need to get licensed. This process includes obtaining a Nebraska auto dealer bond.
The bond provides protection for the state and its citizens, ensuring that your auto dealership will follow the state rules that govern the trade and will safeguard their interests. Thus, auto dealer bonds protect the general public from dealers engaging in fraud and misuse.
For all kinds of surety bonds, there are three parties that sign a contractual agreement. The bond provider is the surety, the obligee is the state of Nebraska that requires the bonding, and your dealership is the principal that posts the bond.
- Surety Bond Name: Nebraska Motor Vehicle, Trailer, Wholesale, or Motorcycle Dealer Bond
- Surety Bond Amount:
- $50,000 auto dealer bond
- Obligee: Nebraska Motor Vehicle Industry Licensing Board
Nebraska State Office Building – 1st floor SW
301 Centennial Mall South
P. O. Box 94697
Lincoln, NE 68509
- Required Expiration Date of the Bond: December 31st of each year
If a Nebraska car dealer breaks their obligations under the bond, claimants can be reimbursed up to the penal sum of the bond. Learn more about bond claims for auto dealers in the Questions section below.
Questions about Auto Dealer Bonds in Nebraska
How much does a Nebraska auto dealer bond cost?
For all types Nebraska dealer licenses, a $50,000 Nebraska motor vehicle dealer bond is required.
This sum is known as the surety bond amount. It represents the maximum compensation that can be claimed on your bond in case you break your contractual obligations.
This, however, does not constitute your surety bond cost. What you need to pay to get bonded is called a bond premium, and is only a fraction of the bond amount.
For standard bonding market applicants, the usual bonding rates are between 1% and 3%. A simple calculation shows that for your $50,000 Nebraska auto dealer bond, you are likely to pay between $500 and $1,500.
|Surety Bond Cost by Credit Score|
|Surety Bond Name||Bond Amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Nebraska Motor Vehicle Dealer Bond||$50,000||$375-$750||$500-$1,500||$1,250-$2,500||$2,500-$5,000|
How can you identify your exact bond premium? This is possible only after you submit a completed application, together with your financial documents. Your surety assesses the strength of your business and finances. It considers your personal credit score, assets and liquidity, and dealership experience. Your bond price will be lower when your overall stats are stronger.
Can I get a Nebraska auto dealer bond with bad credit?
Nebraska car dealers with less-than-perfect credit often have trouble getting bonded. Here at Lance Surety Bonds, we’ve been providing auto dealer bonds to applicants across the country for years. We’re well aware of bad credit bonding difficulties, so we designed our Bad Credit Program to solve this problem.
For dealers with low credit score, past tax liens, civil judgments or bankruptcies, we offer bond premiums in the range of 5%-10%. As bad credit bonding is riskier, the slightly increased bond rates compensate for that.
With Lance Surety Bonds, you are guaranteed to get top bonding rates. We forge close partnerships with numerous A-rated, T-listed surety companies, so we are able to shop around for the right bonding program that matches your situation.
How do I get my Nebraska auto dealer bond?
Starting your bonding process is an easy and straightforward task. You can apply online, and get your free Nebraska auto dealer bond quote in no time.
We’ll get your exact bond price once you’ve completed the full application, together with a set of required documents. Auto dealer bond applications are usually reviewed quite fast.
For any questions or concerns about your application, you can always reach us at (877) 514-5146. Lance Surety Bonds’ experts will be happy to help.
Consult our bonding process page to get a complete overview on how bonding works.
How do I renew my Nebraska auto dealer bond?
Your Nebraska auto dealer license needs to be renewed every year before December 31st, so you can stay in operation. Your bond also has to be renewed at that time to ensure your full compliance.
Lance Surety Bonds takes care that you never forget about your bond renewal. We’ll send you a renewal reminder a few months in advance. This means you’ll have plenty of time to take care of it, and keep your license valid. If needed, we’ll contact you further.
Your surety bond cost can change over time, depending on the fluctuation of your finances. If you can work on improving your credit score and financial stats, you can expect a lower bond price with your next Nebraska car dealer bond renewal.
How do I get my Nebraska auto dealer license?
In order to obtain your Nebraska auto dealer license, you need to apply with the Nebraska Motor Vehicle Industry Licensing Board. You’ll have to supply a few other documents, plus your Nebraska auto dealer bond.
Together with your completed motor vehicle dealer application, you’ll need to submit a zoning permit, office location papers, business hours and business sign proof, ownership details, and payment of the $225 application fee. Check with authorities for the full list of requirements.
How are bond claims handled for auto dealer bonds?
Unlike insurance, your Nebraska auto dealer bond does not protect your dealership. Instead, it safeguards the interests of your clients and guarantees to the state that you will follow all applicable rules.
In case you transgress from your obligations under the bond, an affected party can make a claim on your bond. If proven, the claim can be a serious financial burden for your business. Initially your surety covers the costs, but afterwards you are required to take full financial responsibility.
Claims can hurt your finances, ruin your reputation and prevent you from getting bonded later on, which means you would not be able to get licensed. Because of this, avoiding such situations is the wisest course of action for your dealership.