Auto Dealer Bonds in New Hampshire Explained
In most states, auto dealers have to undergo a licensing procedure before getting the right to operate. This is true for New Hampshire as well. To get your state license in NH, you will need to post an auto dealer bond.
Surety bonds function as an extra layer of protection for state authorities that have issued your license, as well as for your customers. Their purpose is to ensure you will comply with applicable laws and regulations.
The auto dealer bond functions as a contractual agreement between the principal, which is your dealership, and two other bodies. The New Hampshire Department of Safety is the obligee, which demands the bonding, while the surety provides it.
Questions about Auto Dealer Bonds in New Hampshire
When do I have to post this bond?
All dealers who want to get a New Hampshire auto dealer license have to obtain a $25,000 bond. This is an indispensable part of the licensing process which ensures your compliance with Title XXI, Chapter 261 of the New Hampshire Revised Statutes, as well as other applicable laws.
The state authority in charge of auto dealer activities is the Division of Motor Vehicles at the Department of Safety.
Division of Motor Vehicles
Dealer Licensing Bureau
23 Hazen Drive
Concord, NH 03305
What is the New Hampshire auto dealer bond price?
The surety bond cost that you have to cover depends on the bond amount you are required to obtain. In this case, this amount is $25,000. However, you have to pay only a small percentage of it, referred to as the bond premium.
The cost is determined when your surety examines a set of factors with the aim to assess the bonding risk involved. They include your personal credit score, company financials, and assets and liquidity. The stronger these indicators are, the cheaper your bond will be. The rates that you can expect if your finances are in good shape are between 1% to 5%.
|Surety bond name||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|New Hampshire auto dealer bond||$25,000||$187.5-$375||$250-$625||$625-$1,250||$1,250-$2,500|
Can I get bonded with bad credit?
It can be tough for applicants who have a low credit score, tax liens, bankruptcies, and civil judgements to obtain bonding. That’s why Lance Surety Bonds has designed its Bad Credit Surety Bonds program.
Through it, you can get bad credit bonds at rates between 5%-10%. The pricing is slightly higher, so that it can mitigate the increased bonding risk. We strive to offer you top bonding rates with the help of our exclusive partnerships with a number of A-rated, T-listed surety companies.
What is the bonding process like?
Interested in learning more about the bonding process? You can find extensive details in the How to Get Bonded guide.
For further queries, we are here to help. You can call us at (877) 514-5146 to receive expert assistance.
What happens if I get a bond claim?
If you fail to follow your legal obligations, you can receive a claim against your auto dealer bond. This is the way in which bonds protect the state and its citizens.
Your surety first has to examine the validity of the claim. If it is proven, you have to provide a financial reimbursement to the claimants up to the penal sum of your bond, which is $25,000. At first, your surety may step in to provide the compensation. However, as per the bond indemnity agreement, you need to cover all costs afterwards.
As claims are a serious financial and reputational threat for your dealership, the best course of action is to avoid them as much as possible.