What Is a New Mexico Auto Dealer Bond?
If you want to sell motor vehicles in New Mexico, you need to present an auto dealer bond to the state’s Motor Vehicle Division. The bond is an indispensable requirement for getting a New Mexico auto dealer license.
The goal of the surety bond is to ensure you will follow the law in your operations as an auto dealer. It guarantees your compliance with the New Mexico Statutes, Chapter 66, as well as with all other applicable regulations.
Just like other New Mexico surety bonds, yours is also a contractual agreement between three entities. Your dealership is the principal. The obligee is the state Motor Vehicle Division. The surety is the third party which provides the bonding.
Frequently Asked Questions
Who needs to get bonded?
According to Section 66-4-7 of the New Mexico Statutes, motor vehicle dealers and recyclers have to get licensed with the Motor Vehicle Division in the state. The same rule applies for motorcycle dealers.
The completed and duly signed official bond form must be attached in your online application. You have to renew the bond every year before March 31st, so that you remain in compliance with state requirements. Make sure you apply for a license renewal and bonding before February 28th, so that you don’t miss the deadlines.
How much does the dealer bond cost?
New Mexico auto dealers and recyclers have to obtain a $50,000. Motorcycle dealers in the state have to post a $12,500 bond.
Your bond cost depends on the bond amount that you are required to obtain. However, your bond premium can be only 1% to 3% of that amount if your finances are in good shape. Thus, for a $50,000 bond, your price may be between $500 and $1,500.
When you apply with a surety, it has to examine your personal and business finances to assess the level of risk in bonding you. It takes a close look at your credit score, as well as business documents and assets and liquidity. If your overall profile is stable, you can expect to pay less for your bond.
If you want to learn more about the way your bond price is calculated, you can consult our surety bond cost page.
|Bond Type||Surety Bond Amount||Above 700||Between 650-699||Between 600-649||Below 599|
|New Mexico auto dealer and recycler bond||$50,000||$375-$750||$500-$1,500||$1,250-$2,500||$2,500-$5,000|
|New Mexico motorcycle dealer bond||$12,500||$100-$187.5||$125-$375||$312.5-$625||$625-$1,250|
Can I get bonded with bad credit?
If you struggle with problematic finances, this is not an obstacle to get bonded with Lance Surety Bonds. We operate our Bad Credit Surety Bonds program for applicants with credit score, tax liens, bankruptcies, and civil judgements.
You can expect to pay a higher bonding premium, which is often in the range of 5%-10%. This is necessary because the bonding risk is higher. As we work with numerous A-rated, T-listed surety companies, you shouldn’t worry about your bond price because we will shop around for the best option for you.
How do I apply for a bond?
If you’d like to get your exact bond cost, you can complete the full application and your paperwork. In case you need more information on how bonding works, you can consult our extensive How to Get Bonded page.
Our bonding specialists are here to assist you. If you have any questions or need help with your application, don’t hesitate to call us at (877) 514-5146.
What happens in case of a bond claim?
A claim can be made against your bond in case you don’t follow the rules set in the New Mexico Statutes or other applicable regulations. The typical cases when a dealer can get a claim is if they engage in fraud and misuse against customers, provide misleading information, or breach the warranty on sold vehicles.
If a case is proven, you have to reimburse any affected parties. The maximum penalty is the bond amount you have posted. While your surety pays the claim compensation initially, you have to repay it afterwards. This means that bond claims are to be avoided, as they can also prevent you from getting bonded in the future as well.