What is a Washington auto dealer bond?
Many car dealers, especially those who are new to the industry, are not aware of this mandatory licensing requirement. It exists in virtually all states and its purpose is to protect car buyers from cases of fraud. It also protects the state, by making sure dealers are compliant with applicable laws and regulations.
The Washington auto dealer bond is a type of surety bond, and as such, represents a three-party agreement between: a principal (the auto dealer), an obligee (the state) and the surety (the bonding company).
Let’s take a quick look at this agreement:
Surety Bond Name: Washington Motor Vehicle Dealer Bond
Surety Bond Amount: $30,000
Obligee: State of Washington
Business Licensing Service
PO Box 9034
Olympia, WA 98507–9034
Expiration Date: Yearly renewal
Are you ready to apply for your Washington auto dealer bond? Simply click on the button above and follow the instructions of our online application. If you encounter any difficulties, feel free to call us at (877) 514-5146.
Continue reading the questions below for more information about this requirement.
Questions about Auto Dealer Bonds in Washington
How much does a Washington auto dealer bond cost?
It’s always a good idea to know what factors come into play in determining your bond price. You already know that the required bond amount is $30,000. This may sound like a lot, but it isn’t the price that’s required from you. The total bond amount is the maximum financial protection the auto dealer bond can extend to claimants.
Surety bonds resemble insurance in that they are paid for in premiums. Unlike the total bond amounts, which are determined by the state of Washington, your premium is set by the bonding company that underwrites your bond.
Bonding companies will want to know more about you in order to determine the risk they assume by underwriting your auto dealer bond. The most important factor is your personal credit score. If it’s high and you have no major credit issues, your premium will likely be between 1% and 3% of the bond amount.
|Surety Bond Cost Based on Credit Score|
|Bond Type||Surety Bond Amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Washington auto Dealer Bond||$30,000||$300-$450||$300-$900||$750-$1,500||$1,500-$2,250|
For more information be sure to check our What Does a Surety Bond Cost? Guide.
Are bad credit dealer bonds available in Washington?
You shouldn’t be worried about your bad credit standing in the way of obtaining an auto dealer bond. Bonding companies are still willing to underwrite dealer bonds for bad credit applicants, albeit at higher premiums– usually in the range of 5% to 10%.
Lance Surety Bonds offers an exclusive bad credit surety bond program which has a 99% success rate in helping applicants get bonded. The only scenarios where getting bonded isn’t possible is if you have an open bankruptcy or are late on child support payment.
How do I apply for a Washington auto dealer bond?
We have made applying for your dealer bond extremely easy with our online application. It takes you through the process seamlessly and takes no more than a few minutes to fill out and submit.
After submitting it, you will receive a free bond quote and one of our agents will contact you shortly to let you know what else you need to do to make your application final. Upon paying your bond premium, you can expect to have your auto dealer bond ready in a day or two.
If you are experiencing any difficulties with our online application or need assistance, call us at (877) 514-5146 and let us know how we can help.
When do I have to renew my Washington auto dealer bond?
Washington dealer licenses and bonds need to be renewed yearly. Bond renewal is not complicated at all. The bonding agency you work with will send you a bond quote. After you pay it, your bond will be effectively renewed.
Lance Surety Bonds makes sure to always send reminders to its clients, so you never miss a deadline.
How do I apply for a Washington dealer license?
There are a few other important requirements that you need to fulfill prior to submitting your dealer license application. Here are some of them:
- Submit a copy of your property tax statement or rental agreement
- Fill out all applicable applications form (available online)
- Submit a copy of a criminal background check
- Submit a Certificate of Dealer Education (used-car dealers only)
- Pay all applicable fees
Double check that you have completed all necessary paperwork prior to submitting your application.
How are surety bond claims handled?
We always advise dealers to do their best to avoid claims, as they can be costly and can make it harder to get bonded next time around.
Disputes can happen, and in that case the best course of action is to try to reach a settlement out of court. It is usually the least costly and time-consuming option. If this isn’t possible, you will have to fight the case in court. If your bonding company believes the claim is groundless, they will offer legal help.
If the claim is proven, you will be responsible for reimbursing the claimant for the losses they incurred.