DC Motor Vehicle Dealer Bond

The $25,000 amount is the total bond amount, not the actual cost of the surety bond. The total amount refers to the maximum compensation the bond can offer, similar to an insurance policy’s limit.

To get bonded, dealers pay premiums once every two years. Premiums can be as low as 1% for applicants with a clean credit report and a high credit score. Have a look at the table below for some estimations based on the applicant’s credit score.

Submitting additional information can sometimes positively influence your premium. If you have healthy balance sheets or personal financial statements, giving the surety access to them can result in a lower premium. Read more about it on our “What Does a Surety Bond Cost?” page.

In most cases, obtaining a DC motor vehicle dealer bond shouldn’t be impeded because of an applicant’s credit score. It’s true that bad credit signals a higher risk for the surety bond company, but in most cases it will simply results in a higher premium (around 0.75% - 2.5%).

Certain issues with your credit report can also negatively affect your bond price, but in our experience 99% of applicants still get bonded. The only exceptions are applicants who are late on child support payments, or are going through bankruptcy. Read more about getting bonded with bad credit here.

We have devised a simple application process: all you have to do is submit our online application and provide some basic information about your business. You will receive a free bond quote, and we’ll be in touch with you to let you know what else the bonding companies requires. For example, it’s industry standard to sign an indemnity agreement with the surety. If there are multiple owners, do not forget to include each owner.

Once you pay your premium, it usually takes just 1-2 business days for your bond form to be issued. If you need further information about the application process, don’t hesitate to call us at (877)-514-5146.

To get your dealer license, you need to comply with several other requirements in addition to posting the auto dealer bond.

You first need to choose your license type. A new-car dealer license allows you to sell both new and used cars, while a used-car license limits you to used cars only. Next, you’ll fill out the Basic Business License Application (available online after registration) and follow its requirements. These differ slightly based on your ownership structure and resident status.

Here’s what else the registration process entails:

• Provide a registered tax number
• Show a Certificate of Occupancy
• Complete a Clean Hands Self-Certifications Form
• Submit a copy of your Police Criminal History Report
• Provide a list of all salespeople working for you

Use the above information as reference only. Licensing requirements are subject to change, so the best way to get informed is by contacting the Department of Consumer and Regulatory Affairs or visiting their website.

A bond claim can happen if you violate the terms of your contract or use fraudulent business methods. The Department of Consumer and Regulatory Affairs will assess your liability. If you fail to provide compensation within the given timeframe, you can face a bond claim.

It’s best to avoid claims as they can mean higher expenses. More importantly, most bonding companies refuse to underwrite bonds for applicants who’ve had claims in the past.

To avoid claims, you and you salespeople should stay up-to-date with all regulations affecting your industry. As a starting point, you should read D.C. Code, Chapter 15, §50-603.