What Is a South Dakota Auto Dealer Bond?
To get your South Dakota dealer license, you’re required to post a South Dakota auto dealer bond. All dealers in the state need to be bonded and licensed.
Auto dealer bonds protect the state of South Dakota, and the general public, from potential misuse or fraud by dealerships. The intent of the bond is to guarantee that your business will abide by the rules that govern car dealerships in the state.
Like other surety bonds, your South Dakota car dealer bond is a contractual agreement between three entities. The principal is your dealership, who must post the bond. The state of South Dakota is the obligee, and the surety is the company providing the bond backing.
Surety Bond Name: South Dakota Motor Vehicle Dealer Bond
Surety Bond Amount:
$5,000 - Motorcycle Dealer or Snowmobile Dealer Bond
$10,000 - trailer dealer bond (over 3,001 lbs) or emergency vehicle dealer bond
$20,000 - boat dealer bond
$25,000 - new and used motor vehicle dealer, mobile home dealer or final stage manufacturer dealer bond
$50,000 - dealers car action agency bond
Obligee Information: South Dakota Department of RevenueDealer Licensing Office
445 East Capitol Avenue
Pierre, SD 57501
Required Expiration Date of the Bond: Yearly renewal
Claims can be made on your surety bond if you transgress from the state regulations, and they can be a serious threat to your business. Find out more about how claims are handled in the Questions section below. [/question]
Questions about Auto Dealer Bonds in South Dakota
- How much does a South Dakota auto dealer bond cost?
- I get a South Dakota auto dealer bond with bad credit?
- How do I get my South Dakota auto dealer bond?
- How do I renew my South Dakota auto dealer bond?
- How do I get my South Dakota auto dealer license?
- How are bond claims handled for auto dealer bonds?
How much does a South Dakota auto dealer bond cost?
Depending on the type of South Dakota dealer license that you would like to get, you will be asked to post a bond between $5,000 and $50,000.
This sum represents the surety bond amount. It is the largest possible amount that affected parties can get if there is a proven claim against you.
To get bonded, however, you need to pay only a fraction of the bond amount. This is called the bond premium and represents your actual surety bond cost.
The usual percentages for standard market bonding are between 1% and 3%. Thus, for a $25,000 South Dakota auto dealer bond, you can expect to pay between $250 and $750.
|Surety Bond Cost Based on Credit Score|
|Surety Bond Name||Surety Bond Amount||Above 700|
|South Dakota new and used motor vehicle dealer, mobile home dealer or final stage manufacturer dealer bond||$25,000||$188-$375|
|South Dakota dealers car action agency bond||$50,000||$375-$750|
|South Dakota boat dealer bond||$20,000||$150-$300|
|South Dakota trailer dealer bond (over 3,001 lbs) or emergency vehicle dealer bond||$10,000||$100-$150|
|South Dakota motorcycle dealer or snowmobile dealer bond||$5,000||$100-$250|
Your surety sets your bond rate by thoroughly examining your personal and business finances. Your personal credit score is especially important in this assessment. Assets and liquidity, and your professional experience, are also considered. The better your overall business and financial situation is, the lower your bond premium will be.
Our surety bond cost page is a good starting point for understanding how your South Dakota car dealer bond price is set.
I get a South Dakota auto dealer bond with bad credit?
Getting a South Dakota motor vehicle dealer bond if you have troubled finances can be tough. Here at Lance Surety Bonds we know that, so we operate our Bad Credit Program to assist dealers with past tax liens, civil judgments, bankruptcies, or bad credit.
You can expect bond premiums of about 5% to 10%, which are slightly higher than the regular bonding rates. The higher costs mitigate the increased risk of bad credit bonding.
Still, you can be sure that with Lance Surety Bonds, you’re getting the best rate on the market. Our excellent relationships with numerous A-rated, T-listed surety companies give us the opportunity to shop around and find the right bonding program for your case.
How do I get my South Dakota auto dealer bond?
You can start your bonding today in a few easy steps. First, apply online to get a free, no-obligations South Dakota auto dealer bond quote.
Then submit your complete application, together with all required documents. You’ll get your bond price in no time.
For any questions, you can always reach us at (877) 514-5146. Our bonding expert team is here to help you out with your bonding application.
Make sure to check out our How to Get Bonded page to get the complete picture how bonding works.
How do I renew my South Dakota auto dealer bond?
Your South Dakota auto dealer bond has to be renewed together with your South Dakota dealer license on a yearly basis.
You will receive a reminder about the license renewal from the South Dakota Department of Revenue. Getting bonded with Lance Surety Bonds means that you’ll never need to worry about missing a bond renewal deadline. We will send you a renewal reminder a few months in advance. This will be followed up via mail, fax and email, if required. You’ll have enough time and plenty of opportunities to renew your South Dakota auto dealer bond, so you can keep your license and stay in operation.
Every time you renew your bond, you could decrease your surety bond cost. Since your finances can change with time, if you have the opportunity to improve them, your bond price will go down from year to year.
How do I get my South Dakota auto dealer license?
Besides obtaining a South Dakota auto dealer bond, you need to complete a few other steps in order to get your South Dakota dealer license.
You have to prepare all documents required in the South Dakota Dealer License Application. These include– among others– proper zoning papers, a certificate of public liability insurance policy, and franchise papers, if applicable. The initial license fee is $300. The license is renewed annually and the renewal fee is $175.
How are bond claims handled for auto dealer bonds?
When getting bonded, it’s important to remember that your South Dakota auto dealer bond is not the same as your insurance. The bond protects your clients and not your business.
If you fail to follow the applicable state rules, you can face a claim on your bond. Affected individuals or entities can be compensated up to the penal sum of the bond if the claim is proven. Initially your surety will pay the claim, but you are required to repay it soon after.
The wisest course of action is to avoid claims. They are potentially very harmful for your dealership’s finances, as well as for your business reputation. After having a claim, it can be also difficult to obtain bonds, and therefore to continue operation in the field.