What Is a West Virginia Auto Dealer Bond?
If you want to run a car dealership in West Virginia, you have to obtain a West Virginia dealer license. One of the most important requirements to get licensed is to post an auto dealer bond.
As a protective measure for the state and its citizens, the West Virginia auto dealer bond guarantees that your dealership will not disobey state rules.
Like other types of surety bonds, West Virginia auto dealer bonds are a contractual agreement between three parties. The principal is your dealership, which needs to post the bond. The state authority that requires it is the obligee, while the bond provider is the surety.
- Surety Bond Name: West Virginia Motor Vehicle Dealer Bond"
- Surety Bond Amount:
- $25,000 auto dealer bond
- Obligee: West Virginia Division of Motor Vehicles
PO Box 17100
Charleston, WV 25317
- Required Expiration Date of the Bond: June 30th of each year
If your dealership engages in fraudulent activities, or otherwise doesn’t comply with state rules, an affected party can file a claim on the bond. Claims can have serious financial consequences. You can read more about how claims against auto dealers bonds are handled in the Questions section below.
Questions about Auto Dealer Bonds in West Virginia
- How much does a West Virginia auto dealer bond cost?
- Can I get an West Virginia auto dealer bond with bad credit?
- How do I get my West Virginia auto dealer bond?
- How do I renew my West Virginia auto dealer bond?
- How do I get my West Virginia auto dealer license?
- How are bond claims handled for auto dealer bonds?
How much does a West Virginia auto dealer bond cost?
The West Virginia Department of Motor Vehicles requires new and used auto dealers to obtain a $25,000 West Virginia auto dealer bond. Only repo-financial institutions, manufacturers, and transporters are exempt from this requirement.
Getting bonded means you need to pay only a fraction of this amount, called the bond premium. The surety bond amount, on the other hand, is the maximum penal sum that can be repaid on proven claims against you.
If you qualify for the standard bonding market, you can expect a bond premium in the range of 1%-3%. For the $25,000 West Virginia auto dealer bond, this means a bond cost of $250-$750.
|Surety Bond Cost by Credit Score|
|Surety Bond Name||Surety Bond Amount||Above 700||Between 650-699||Between 600-649||Below 599|
|West Virginia Auto Dealer Bond||$25,000||$188-$375||$250-$750||$625-$1,250||$1,250-$2,500|
To get your exact surety bond cost, you need to complete a full application with your surety. The surety reviews your personal and businesses finances, paying special attention to your personal credit score, assets and liquidity, and business experience. The bond price is set on the basis of the strength of your finances. If you are not considered a high-risk applicant, you will get a better price for your West Virginia auto dealer bond.
Our surety bond cost page is a great resource on how your bond price is formulated.
Can I get an West Virginia auto dealer bond with bad credit?
If your credit score is far from stellar, or you have past tax liens, civil judgments, or bankruptcies, there is still an opportunity to get the bond you need. Lance Surety Bonds offers a Bad Credit Program to help dealers with financial troubles.
You can expect a bond premium in the range of 5%-10%. Since it is riskier to bond bad credit applicants, the higher price compensates for it. Still, the program is an excellent way to get your West Virginia auto dealer bond and stay in business.
Here at Lance, we foster tight partnerships with multiple A-rated, T-listed surety companies. This allows us to select the best bonding option for you, and offer you a great bond rate, whatever your credit score is.
How do I get my West Virginia auto dealer bond?
To start your bonding process, you can apply online today. You will get your free, no-obligations West Virginia auto dealer bond quote in no time.
For your exact bond cost, go ahead and submit your full application, so that we can assess your profile.
Call us at (877) 514-5146 for any questions you have about your application or the bonding process. Lance Surety Bonds’ experts will be happy to help you.
Check out our How to Get Bonded page for a complete overview of how bonding works.
How do I renew my West Virginia auto dealer bond?
Your West Virginia auto dealer must be active throughout your licensing period. That’s why you need to renew it before June 30th of each year, together with your West Virginia dealer license.
Getting bonded with Lance Surety Bonds comes with some great perks. We will send you a renewal reminder several months before the renewal deadline. If needed we will contact you again via mail, fax, and email. This way, you can be sure that you won’t miss the renewal date. Keeping your bond means that you can run your business in the new licensing period.
Don’t forget that your surety bond cost can change over time. This means that if you work on improving your financials, the next time you renew your bond, you can actually pay less for it.
How do I get my West Virginia auto dealer license?
To obtain your West Virginia car dealer license, you need to meet a range of requirements and provide a set of paperwork, in addition the auto dealer bond.
The West Virginia Department of Motor Vehicles requires you to complete an application form. You need to submit it together with a valid business license, dealer liability insurance, personal property tax receipts, and pictures of dealerships and business signs. The licensing period runs from July 1st to June 20th of each year. The application fee is $250 for most types of licenses.
How are bond claims handled for auto dealer bonds?
It’s important to differentiate between surety bonds and insurance. Unlike the latter, bonds do not protect your business from unforeseen circumstances. They safeguard the interests of the state and of your customers.
West Virginia car dealers who don’t follow applicable rules might get a claim on their bond. The highest penal sum on proven claims in the state is $25,000. If a compensation needs to be repaid to affected parties, the surety pays it at first. However, dealers need to reimburse it soon after. That’s why claims can be a serious threat to your dealership’s success. They can also hamper the bonding process in the future.