What Is a Connecticut Auto Dealer Bond?
Just like in many other states, if you want to start a car dealership in Connecticut you need to get licensed. For most types of licenses, you’ll also need a Connecticut motor vehicle dealer bond.
Auto dealer bonds act as protection for the state of Connecticut, and the general public, guaranteeing that your dealership will comply with any regulations that apply to your dealership.
A Connecticut auto dealer bond functions similarly to a contract between three parties, just like other surety bonds do. The first party is the principal, which is your dealership in this case. Second is the obligee, which is the state of Connecticut that requires the bond. Finally, the surety is the company providing the bond backing.
- Surety Bond Name: Connecticut Motor Vehicle Dealer Surety Bond
- Surety Bond Amount:
- $5,000 for motor vehicle repairer bond
- $10,000 for easing or rental company bond
- $50,000 for new or used motor vehicle dealer bond
- Obligee: State of Connecticut Department of Motor Vehicles - Dealers and Repairers Section 60 State Street Wethersfield, CT 06161
- Required Expiration Date of the Bond: Biennial renewal
If you, the principal, break your commitments under the bond, an affected party can make a claim against you, which can be a serious burden for your business. The Questions section below can give you more information about the way claims are handled for auto dealers.
Questions about Auto Dealer Bond in Connecticut
- How much does a Connecticut auto dealer bond cost?
- Can I get a Connecticut auto dealer bond with bad credit?
- How do I get my Connecticut auto dealer bond?
- How do I renew my Connecticut auto dealer bond?
- How do I get my Connecticut auto dealer license?
- How are bond claims handled for auto dealer bonds?
How much does a Connecticut auto dealer bond cost?
There are three main types of Connecticut auto dealer licenses. Most licenses require posting a bonding amount between $5,000 and $50,000, depending on the bond.
If you want to operate as a repairer, the amount is $5,000. For leasing or rental companies, a $10,000 bond is needed. Finally, for a new or used motor vehicle dealer, the required amount is $50,000.
While these numbers might sound hefty, in reality you need to pay only a fraction of these surety bond amounts in order to get bonded. The bond amount is the largest penal sum that may be repaid to affected parties on proven claims.
Your actual surety bond cost, however, is usually between 1% and 3% of that amount, which is called the bond premium. If you need to post a $10,000 Connecticut auto dealer bond, this means your premium is likely to be between $100 and $300 if you qualify for the standard bonding market.
|Surety Bond Cost by Credit Score|
|Surety Bond Name||Bond Amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Connecticut New or Used Motor Vehicle Dealer Bond||$50,000||$375-$750||$500-$1,500||$1,250-$2,500||$2,500-$5,000|
|Connecticut leasing or rental company bond||$10,000||$100-$150||$100-$300||$250-$500||$500-$1,000|
|Connecticut Мotor Vehicle Repairer Bond||$5,000||$100-$250||$100-$250||$125-$250||$250-$500|
Your surety bond price is determined through a careful consideration of your personal credit score, personal and business finances, showcased assets and liquidity, as well as your professional experience. The stronger your business is financially, the lower your bond premium would be.
Visit our Surety Bond Cost page to get a better understanding of how your bond cost is formulated.
Can I get a Connecticut auto dealer bond with bad credit?
Obtaining a Connecticut auto dealer bond with bad credit is definitely possible, but here at Lance Surety Bonds we know how difficult it may be for auto dealers with problematic finances. That’s why we offer our Bad Credit Program, so dealers with past tax liens, civil judgments, bankruptcies, or bad credit, still have a chance to get bonded.
Bad credit bonding premiums are in the range of 5% to 10%. The slightly higher rates compensate for the increased risk, enabling you to obtain the Connecticut auto dealer bond you need.
With Lance Surety Bonds, you can trust that you’re paying the lowest possible price for your bad credit bonding. We foster connections with a number of A-rated, T-listed surety companies, so we can choose the most appropriate bonding option for your particular case.
How do I get my Connecticut auto dealer bond?
Starting your bonding process is easy. You can just apply online for your free Connecticut auto dealer bond quote today.
For your exact bond price, you need to take one additional step, and submit the rest of the required documents. We’ll deliver your bond price in no time.
If you have any questions or need assistance with your bonding application, you can call us at (877) 514-5146. Our bonding specialists are here to help.
You can get a complete idea about the process of getting bonded here.
How do I renew my Connecticut auto dealer bond?
Along with renewing your Connecticut auto dealer license every two years, you have to renew your Connecticut motor vehicle dealer bond too. This guarantees your continuous compliance.
The perks of getting bonded with Lance Surety Bonds include a bond renewal reminder from us a few months in advance. We will contact you further if needed, so that you have enough time and opportunities to renew your bond and stay in operation.
Don’t forget that every renewal is a chance to decrease your surety bond cost. Just make sure to work on improving your financial stats and personal credit score, and you will pay less for your bond over time.
How do I get my Connecticut auto dealer license?
On top of providing a Connecticut car dealer bond for some types of licences, you need to submit a list of other documents in order to obtain your Connecticut car dealer license from the Connecticut Department of Motor Vehicles.
Besides completing the correct license application for your license of choice, in most cases you also need to furnish signed zoning papers, liability insurance policy and a Sales Tax Permit from the Revenue Service, among others.
The application fee for all licenses is $140. The different types of licenses cost between $340 and $700 for a two-year period.
How are bond claims handled for auto dealer bonds?
Unlike insurance, your Connecticut auto dealer bond does not protect your business. Instead, it protects your clients and the state.
Affected individuals or entities can file a claim against your bond. If proven, they might be reimbursed up to the penal sum of the bond. The claim is initially paid by your surety. However, you need to fully compensate it soon after.
Because of the conditions of bonding, it’s always smart to avoid situations that can lead to claims. They can seriously damage your business name, as well as your financials. Getting bonded after a claim is difficult and can further hinder your dealership’s success.
Still Have Questions? Check Our FAQ Pages
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