Time to Renew: Florida Auto Dealer Bonds Expire April 30th
In accordance with state regulations, all Florida auto dealer licenses expire on April 30th each year. The only exception is for mobile home dealers, whose licenses will end on September 30th.
Here are some of the requirements for a Florida dealer license renewal:
- at least eight hours of continuing education at an approved institution
- a $75 renewal fee
- a renewed motor vehicle dealer bond since it expires on the same date
(if you are an independent dealer)
Read on for the specifics of Florida dealer bonds and how they can be obtained at the lowest possible price.
Florida Auto Dealer Bonds Explained
For those of you who are relatively new to the industry, I will go through the basic definition of auto dealer bonds. Auto dealer bonds are required of dealerships in all 50 states. They are a type of surety bond and as such work as a three-party agreement between an obligee, a principal and a surety.
In this specific case, the principal is the auto dealership, the obligee is the Florida Department of Highway Safety and Motor Vehicles, and the surety is the company providing the bond. Auto dealer bonds are designed to help regulate the auto industry. They make sure that the principal will act in accordance with state laws and regulations and that they will not use unfair business practices towards their customers.
The role of the surety in all this is that they guarantee to the obligee that the principal will not breach the agreement. In case such a breach occurs, the surety and the principal have the legal responsibility to compensate the person or business entity, which filed the claim.
How to Renew Your Bond
Auto dealer bonds are underwritten by surety bond companies, but you get in contact with them with the help of surety bond agencies. If you want to get the best possible quote on your auto dealer bond, you should make sure you work with an agency that has established relationships with a big network of surety bonds companies.
Having said that, this is one of the main reasons to choose us at Lance Surety Bonds. We have rich experience in providing good prices on surety bonds for auto dealers, precisely because we work with many and different underwriters.
When it comes to the state of Florida, we’re the agency that offers not only the best rates, but also the quickest service. You can receive your free quote within minutes of submitting your online application and if you have any difficulties, we can help you with that, too – our agents have rich expertise in processing Florida dealer bonds and will be happy to answer any questions.
If you are pressed for time, we can issue a new bond policy within 24 hours of receiving your application, although it is advisable that you don’t wait until the last minute. It’s illegal to operate without a valid license
What If You Have Bad Credit?
Another reason that you need an agency with many partners is that getting bonded in Florida is very difficult if you have bad credit. A lot of underwriters refuse to issue a bond for dealers with bad credit, because it involves a big risk for them. Sureties assume a 0% loss ratio for each bond, so a low credit score or other credit issues, such as tax liens, civil judgments or bankruptcies, make it harder for you to get an auto dealer bond.
But Lance Surety Bonds can get most dealers bonded, even if it requires slightly higher annual premiums for the first couple of years. That shouldn’t bother you, however, because improving your credit score will drive the price you pay down each year.
Finally, we can promise that no matter what kind of bond you get, your obligee will accept it or you get your money back.
So What Is the Premium Price?
Auto dealer bonds are paid in annual premiums, which are calculated as a percentage of the total amount of the bond required. The total amount of your bond depends on the type of dealership you own. New and used car dealers, as well as mobile home dealers, need to post a $25,000 surety bond, while recreational vehicle dealers are required to post only $10,000.
The price you pay will depend on the size and location of you dealership(s), but the biggest factor by far will be your personal credit score. If your credit is outstanding, you will pay premiums between 1% to 3% of the total amount. For applicants with credit issues the price can go up to a 15% annual payment.
After you receive your dealer bond, you and your surety agent need to fill out the HSMV 86020 form and mail it to the following address:
STATE OF FLORIDA SURETY BOND
DEPARTMENT OF HIGHWAY MOTOR VEHICLE DEALER
SAFETY and MOTOR VEHICLES 2900 APALACHEE PARKWAY
ROOM A312, Mailstop #65
TALLAHASSEE, FLORIDA 32399-0500
This will effectively renew your bond till April 30th next year.
This is an overview of how to get a Florida auto dealer bond issued or renewed, one of the most important parts of the Florida dealer license renewal process. There is little time left before the deadline, so we urge you to file your application as soon as possible. You can either do it online or by calling us at (877) 514-5146. We would be more than happy to find you the best quote and answer all of your questions.