Higher Bond Amounts for Car Dealers in Maine
Are you a car dealer in Maine, or just planning to launch your business? After September 15, 2017, you will have to comply with new auto dealer bond requirements.
Maine House Bill 1084 introduces a number of changes for auto dealers in the state. Most notably, the legislation raises the bond amounts that car sellers have to post as a part of their licensing process. Without proper bonding, dealers cannot operate legally.
Here are the main upcoming changes for Maine auto dealers, so you can get prepared in advance.
The new Maine auto dealer bond amounts
In order to legally work, dealers in Maine have to undergo a licensing process with the Secretary of State’s Bureau of Motor Vehicles. It is the authority that oversees the activities of car sellers in the state. A part of the licensing is posting a Maine motor vehicle bond.
With the new bill, if you are applying for a license for the first time, your bond amount will be determined by the Bureau on a case by case basis. It will set the amount by making a projection about your yearly sales volume.
If you are renewing your license, your bond amount will be based on your sales volume for the previous year. Before the changes, the amounts varied from $5,000 to $25,000. Now the bond amounts were increased and range from $25,000 to $100,000:
- $25,000 for up to 50 vehicles sold
- $50,000 for up to 100 vehicles sold
- $75,000 for up to 150 vehicles sold
- $100,000 for more than 150 vehicles sold
All bonds must be presented in the official bond form provided by the Bureau.
How to save on your bonding costs
Even though the Maine auto dealer bond amounts have gone up, you can still work on controlling your surety bond cost. The price you pay to get bonded depends on a number of factors, including your credit score, business finances, and assets and liquidity. If your finances are in good shape, your bond premium can be as low as 1%-3% of the bond amount you have to post.
Thus, before the next license and bond renewal, you can work on putting your finances in order. It’s best if you can improve your credit score and cover any outstanding payments. You can also make sure you showcase your financial strength by providing paperwork on any assets and liquidity you may have.