What Is a Oregon Auto Dealer Bond?
The Oregon Department of Motor Vehicles (DMV) requires auto dealers to post an auto dealer bond when applying for a license. This requirement applies to dealers selling motor vehicles and recreational vehicles, as well as those selling mopeds, snowmobiles, motorcycles, and ATVs.
The Oregon dealer bond protects consumers and the state against auto dealers who commit fraud or other unlawful business practices. Namely, it offers protection against those dealers who violate the sections in the Oregon Administrative Rule (OAR) and the Oregon Revised Statutes (ORS) that apply to dealers.
The Oregon motor vehicle dealer bond functions as an agreement between the auto dealer (the bond principal), the Oregon DMV and the public (the bond obligees), and the surety bond company issuing and backing the bond.
Here are the key facts about the Oregon auto dealer bond:
- Surety Bond Name: Oregon Auto Dealer Bond
- Surety Bond Amount: $40,000 or $2,000 depending on the type of vehicles sold
- Obligee: Driver and Motor Vehicle Services
1905 Lana Ave NE
Salem, OR 97314
- Expiration Date of the Bond: N/A
When an auto dealer is found to be in breach of regulations, a claim can be filed by the obligees against their bond. The surety will then investigate the case, and compensate obligees if they have been wronged. Keep reading below for more answers about how you can get bonded in Oregon, and how much your Oregon auto dealer bond will cost.
Questions about Surety Bonds in Oregon
- Do all Oregon car dealers need to get a bond?
- How much does a Oregon auto dealer bond cost?
- Can I get an Oregon auto dealer bond with bad credit?
- How do I get my Oregon auto dealer bond?
- How do I renew my Oregon auto dealer bond?
- How do I get my Oregon auto dealer license?
- How are bond claims handled for auto dealer bonds?
Do all Oregon car dealers need to get a bond?
Yes, all Oregon car dealers who sell motor and recreational vehicles, either new or old, as well as those selling ATVs, motorcycles, mopeds, and snowmobiles, must obtain the relevant bond. Auto and RV dealers must obtain a $40,000 Oregon auto dealer bond, and dealers of smaller vehicles, a $2,000 bond.
How much does a Oregon auto dealer bond cost?
The cost of your dealer bond depends on the type of bond you are obtaining. The cost of a bond is always a percentage of the total amount of the bond. In this case, there are two types of bond in Oregon: a $40,000 bond and a $2,000 bond.
Your surety bond premium is determined by sureties when you apply for your bond. Standard rates for bonds range between 1% and 3% of the total bond amount for applicants with a high credit score. As you can see in the table below, getting a dealer bond in Oregon at a standard market rate may cost somewhere between $400 and $1,200.
|Surety Bond Cost Based on Credit Score|
|Surety Bond Name||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Oregon Motor Vehicle Dealer Bond||$40,000||300-$600||400-$1,200||$1,000-$2,000||$2,000-$4,000|
|Oregon ATV, Motorcycle, Moped and Snowmobile Dealer Bond||$2,000||$100||$100||$100||$100-$200|
Surety bond cost varies for each applicant. Sureties determine the rate they offer to applicants by considering their personal credit score, financial statements and history, as well as their liquidity and work experience. Typically, the higher your credit score, the lower your bond rate.
Find out more about what determines your premium on our “Surety Bond Cost” page.
Can I get an Oregon auto dealer bond with bad credit?
With Lance Surety Bonds, even applicants with a bad credit score– or no credit score– can get an Oregon dealer bond.
Our Bad Credit Program offers bonds at rates between 5%-10% of the total amount. This enables those applicants who may struggle to get bonded elsewhere, to get the bond they need and open a dealership. Rates under this program are slightly higher, to accommodate the risk involved in bonding applicants with lower credit scores.
We work with a number of highly professional A-rated and T-listed surety bond companies, which provide us with tailored rates for each of our applicants. And by getting bonded, such applicants have the chance to improve their credit score and get a lower rate next time around.
How do I get my Oregon auto dealer bond?
Simply apply online by submitting your surety bond application. We’ll contact you with your free quote.
If you would like to speak to one of our surety bond experts, give us a call at (877) 514-5146. Our experts are familiar with all Oregon bonding requirements, and can provide you with assistance if you need any help in filling out your application.
Want to know more? Our “How to Get Bonded” page contains plenty of information explaining how obtaining a surety bond works.
How do I renew my Oregon auto dealer bond?
Oregon auto dealer licenses expire three years after they have been issued. You must renew your bond along with your license. There are no fixed expiration dates for licenses and bonds in Oregon, these depend on the time of licensing.
Lance Surety Bonds will send you a renewal reminder minimum two months prior to your bond’s expiration date, so you’ll be ready to renew in plenty of time.
When you renew your bond, you may be given a new rate by the surety which takes your current credit score into account. If your credit score has improved since the last time you got bonded, you can expect to get a better quote on your new bond.
How do I get my Oregon auto dealer license?
Licenses are issued by the Oregon DMV. For a detailed description of the process, and all relevant application forms, consult the Oregon DMV Instruction for Becoming a Dealer. Below are some of the basics:
- Submit the relevant license application (standard or special, depending on license)
- Provide personal information and photo IDs
- Provide business location information and city or county zoning approval
- Submit a surety bond
- Submit liability insurance certification
- Pass an eight hour pre-licensing education course
How are bond claims handled for auto dealer bonds?
Bond claims can cause many difficulties to auto dealers– they threaten financial and business stability, as well as the good name of the dealer.
Claims are typically filed by consumers or the DMV when an auto dealer in violation of the Oregon laws governing dealerships. If the claim is legitimate, the surety company backing the dealer bond must compensate obligees for the damages and losses they have sustained, up to the full penal sum of the bond.
In return, dealers must then compensate their surety for the backing they have extended. This is because bonds work like a line of credit, which must be repaid. For this reason and because of the sometimes long and tedious process of dealing with bond claims, dealers should always try to avoid claims against their bond.