Maryland Auto Dealer Bond

Complete Guide to Bonding a Car Dealership

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  • Lance Surety Bonds gets auto dealers bonded across the country
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How to Get an Auto Dealer Surety Bond

What Is a Maryland Auto Dealer Bond?

Maryland car dealers need to obtain a Maryland dealer license from the Department of Transportation, in order to operate legally in the state. One of the main prerequisites for getting licensed is posting a Maryland auto dealer bond.

The goal of your auto dealer bond is to protect the state of Maryland, and its citizens, from any fraudulent activities that dealers might engage in. It guarantees compliance with all applicable regulations on car sales.

Your Maryland car dealer bond works like all other surety bonds: as a contractual agreement between parties. The Maryland Department of Transportation is the obligee, your dealership is the principal, and the surety is the entity underwriting the bond.

  • Surety Bond Name: Maryland Surety Bond of Vehicle or Trailer Dealer
  • Surety Bond Amount:
    • $50,000-$300,000 for new vehicle dealer bond
    • $15,000-$150,000 for Maryland used vehicle dealer or wholesale dealer bond
  • Obligee: Maryland Motor Vehicle Administration 6601 Ritchie Highway, N.E. Glen Burnie, Maryland 21062
  • Required Expiration Date of the Bond: Biannual renewal

In case the obligee or another affected party files a claim against your bond, you can face serious financial consequences. The Questions section below explains how bond claims for dealers are managed.

Questions about Auto Dealer Bond in Maryland

How much does a Maryland auto dealer bond cost?

Depending on the type of Maryland car dealer license you need, and the number of vehicles you sell, you are required to post a bond between $15,000 and $300,000.

The surety bond amount set by the Maryland Department of Transportation represents the maximum compensation that can be awarded to affected parties, in case there is a proven claim against your dealership.

However, Maryland car dealers are not required to pay the whole amount. You need to cover only a small fraction of it, which is referred to as the bond premium.

The percentages for standard bonding market are between 1% and 3% of the bond amount. A simple calculation shows that for a $50,000 Maryland auto dealer bond, you’ll have to pay between $500 and $1,500.

Dealer Bond Cost by Credit Score and Number of Vehicles Sold
Maryland New Vehicle Dealer Bond
Number of Vehicles Sold Surety Bond Amount Above 700 Between 650-699 Between 600-649 Below 599
1-500 $50,000 $375-$750 $500-$1,500 $1,250-$2,500 $2,500-$3,500
501-1,000 $75,000 $562.5-$1,125 $750-$2,250 $1,875-$3,750 $3,750-$5,625
1,001-2,500 $100,000 $750-$1,500 $1,000-$3,000 $2,500-$5,000 $5,000-$7,500
Over 2,500 $300,000 $2,250-$4,500 $3,000-$9,000 $7,500-$15,000 $15,000-$22,500
Maryland Used Vehicle Dealer Bond or Wholesale Dealer Bond
Number of Vehicles Sold Surety Bond Amount Above 700 Between 650-699 Between 600-649 Below 599
1-250 $15,000 $125-$250 $150-$450 $375-$750 $750-$1,500
251-500 $25,000 $188-$375 $250-$750 $625-$1,250 $1,250-$2,500
501-1,000 $35,000 $262.5-$525 $350-$1,050 $875-$1,750 $1,750-$2,625
1,001-2,500 $50,000 $375-$750 $500-$1,500 $1,250-$2,500 $2,500-$3,500
Over 2,500 $150,000 $1,125-$2,250 $1,500-$4,500 $3,750-$7,500 $7,500-$11,250

* This table provides a ballpark estimate of potential bond costs. Bond pricing can fluctuate over time due to a number of factors. For exact pricing, please complete an application.

Your exact bond price is formulated after your surety takes a close look at your overall business situation. It considers your personal credit score, business experience, and business financials, as well as your showcased assets and liquidity. The bond premium you will get is lower when your finances are more stable.

Learn more about how your surety bond cost is set here.

Can I get a Maryland auto dealer bond with bad credit?

Maryland auto dealers with less-than-stellar credit scores often run into difficulties when trying to get bonded, as many sureties turn down bad credit applicants. At Lance Surety Bonds, we are committed to getting you the Maryland motor vehicle dealer bond you need. That’s why we created our Bad Credit Program.

You can expect bond rates in the range of 5%-10%, to compensate for the riskier nature of the bonding. However, the program is an excellent option for staying in business and improving your credit situation with time.

What’s more, with Lance Surety Bonds you can count on getting the best price offer on your bond. We work with many established A-rated, T-listed surety companies, which enables us to match applicants to the best bonding option for their case.

How do I get my Maryland auto dealer bond?

Apply online today for your free Maryland auto dealer bond quote! Starting your bonding process is very easy and application reviews for dealers are usually quite fast.

You can speak to one of our bonding experts if you have questions about bonding, or your application. Just call us at (877) 514-5146 to get assistance.
You can find a detailed explanation of the bonding process here.

How do I renew my Maryland auto dealer bond?

Together with renewing your Maryland dealer license biannually, you also need to renew your Maryland auto dealer bond.

The renewal process for Lance Surety Bonds’ clients is simple and straightforward. We will send you a renewal reminder a few months in advance, and will contact you again if needed. This way, you can be sure you won’t miss your opportunity to renew your bond and stay in operation.

Every time you renew your bond, you have the opportunity to lower your surety bond cost. As your financial situation changes over time, if you manage to improve your credit score and other stats, your Maryland car dealer bond premium will go down.

How do I get my Maryland auto dealer license?

Maryland auto dealers must apply with the Department of Transportation for their license. Along with your completed application and Maryland auto dealer bond, there is a list of other documents that you’re asked to present.

The requirements include submitting zoning approval papers, your criminal background check, a trader’s license copy, a proof of repair facility or contract for such services, and an Electronic Registration and Titling (ERT). The license fee for the two-year licensing period is $500.

How are bond claims handled for auto dealer bonds?

Proven claims on your Maryland auto dealer bond are a serious threat to your business’ stability and reputation. That’s why they should be avoided as much as possible.

This is because bonds function in a different way from insurance. They protect your clients and their interests. If you go against them, they can file a claim against you.

The compensation for affected parties can be as high as the penal sum of your bond. Your surety takes care of the reimbursement at first, but shortly afterwards you need to fully repay it, which another good reason to avoid claims.

Still Have Questions? Check Our FAQ Pages

What Our Clients Have To Say?

  • Kimberlee Ables
    Quick response times and turn around for issuing bonds. Great customer service and very knowledgeable. We have used Lance Surety multiple times and have never been disappointed. Highly recommend them and Collette!
  • Andrew Poincot
    Long story short, these guys cut through the B.S. and get the job done. Responsiveness, excellent! Communication, excellent! Respect for their industry partners, excellent! John, Collette, Ryan, you're all-stars! Thank you!
  • Margie Martinez
    We decided for Lance Surety Bond's quote for 2 reasons; Price and Customer Service. Our Representative Ryan was just SUPERB!! [...] I highly recommend Lance Surety Bond for all your Bonding needs! I'll definitely come back for all of mine. :-) Thanks Ryan!