How to get Oklahoma used car dealer license cheaper and easier
The state of automotive sales, new and used alike, hasn’t been better in a long time. If you have chosen Oklahoma as the place to open or expand your business, it helps to know the major steps in licensing requirements and auto dealer bonds and you can even save a little money. Let’s focus on used-car dealerships.
Auto dealerships in Oklahoma are regulated through the Oklahoma Motor Vehicle Commission law. It distinguishes between used-car dealerships and new-car dealerships. New-car dealerships have franchise agreements with a particular automaker. They can sell both new and used cars. Used-car dealerships, on the other hand, can only sell used cars on their lots.
Used-car dealers must register with the Oklahoma Used Motor Vehicles and Parts Commission. They have a long and extensive list of rules and regulations which you can use as reference when preparing your application. You need to pay a $200 licensing fee when you first open your dealership and then $100 annually for the license renewal. You also need to post an auto dealer bond.
Oklahoma auto dealer bonds
Auto dealer bonds are required from car dealerships in every state. You shouldn’t confuse them with insurance. While your insurance protects the cars you sell, auto dealer bonds serve as protection for your customers. By posting an auto dealer bond, you promise to run your business ethically. That means knowing the state’s rules and regulations and acting in accordance with them. It also means treating your customers fairly and not using fraudulent business methods.
An auto dealer bond is underwritten by a surety bonds company, which guarantees that you are capable of keeping the agreement. This makes the surety legally responsible to cover all losses, caused by any negligent behavior on your part. Of course, it makes you legally responsible too. Auto dealer bonds go by other names too, such as MVD bonds, DMV bonds or used-car dealer bonds.
Dealerships in Oklahoma
The state of Oklahoma requires all used-car dealers to post a $15,000 auto dealer bond. Don’t worry, you don’t have to pay that full amount. Auto dealer bonds are paid in annual premiums. Premiums are a certain percentage of the total bond amount and are calculated after you submit certain details about your operation such as business location, size, etc. But the price of your premium is for the most part dependent on your personal credit score. There’s a good reason for that. Surety bonds companies always assume a 0% loss ratio. They see your credit score as a way to determine your likelihood of triggering a claim.
Thus, if your credit score is good, you will pay annual premiums of 1% – 5% of the total amount of the auto dealer bond. If you have bad credit (650 or below) you will find a harder time getting bonded but it’s still possible. Annual premiums for people with bad credit range between 5% and 15% and in rare cases might require a collateral too. There are other conditions which affect the pricing of your bond (and your chances of getting one), such as tax liens, civil judgments and bankruptcies. Currently, only people with open bankruptcies and late child support payments cannot obtain an auto dealer bond.
Auto dealer bonds can be quickly obtained through the website of a surety bonds agency, which works with a big network of sureties. That increases your chances of getting bonded and paying the most favorable price possible.
Once you obtain your auto dealer bоnd, you need to renew it annually, just like your license. Keep in mind the state of Oklahoma requires all dealer bonds to expire on 31st December each year, regardless of when they were issued.
Latest posts by Victor J. Lance, President/Owner (see all)
- Your Arizona Contractor License Guide - July 6, 2020
- Your Quick Guide to Becoming a Licensed Contractor in New Jersey - July 5, 2020
- How To Become a Contractor: 2020 Survival Guide - June 17, 2020