What Is a Nevada Auto Dealer Bond?
If you want to open a car dealership in Nevada, you need to get licensed with the state Department of Vehicles. You have to present an auto dealer bond as a part of the process.
Your dealer bond guarantees your compliance with all applicable laws. It ensures you will follow your obligations in your work with customers, so that their interests are protected. In case you fail to do so, you can face a claim on your bond.
Similarly to the rest of Nevada surety bonds, your bond is a contract between three entities. Your business is the principal that needs the bond. The state DMV is the obligee. The third party is the surety that provides the bonding.
Questions about Auto Dealer Bond in Nevada
Who needs to get bonded?
There are a number of different dealer license types that you can obtain in the Silver State. For most of Nevada auto dealer licenses, you will need to obtain a bond. If you want to operate as a broker, dealer, rebuilder, lessor, distributor or manufacturer, you have to use the respective official bond form to provide your $100,000 bond.
In case you want to work on wrecking or salvage pools, you need another bond form, The bond amount is $50,000. Body shops and garages have to post their $10,000 bond with the respective form, as well as transporters, who have to post a $100,000 bond.
If you want to sell utility or boat trailers with a weight of 3,500 or less, your bond amount is $10,000. The bond amount is $50,000 for motorcycles, horse trailers without living quarters, or utility trailers with a weight of more than 3,501.
Nevada Department of Motor Vehicles
Occupational and Business Licensing
555 Wright Way
Carson City, NV 89711
How much does the dealer bond cost?
The surety bond cost that you have to pay depends on the bond amount which you are required to post by the Nevada the DMV. The amounts are $10,000, $50,000 and $100,000. You can consult the table just below to see referential prices.
To get bonded, you only need to cover a bond premium. It can be as low as 1% to 3% of the bond amount if your finances are stable.
When you apply with your surety, it has to assess your personal and business finances to measure the level of bonding risk. The factors that matter are your personal credit score, as well as business documents and any assets and liquidity. Your bond price will be lower if your finances are in good shape.
|Surety bond name||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Utility or boat trailers with a weight of 3,500 or less dealer bond and body shop and garage bond||$10,000||$100-$150||$100-$300||$250-$500||$500-$1,000|
|Motorcycles, horse trailers without living quarters, and utility trailers with a weight of more than 3,501 dealer bond and wrecker and salvage pool bond||$50,000||$375-$750||$500-$1,500||$1,250-$2,500||$2,500-$5,000|
|Broker, dealer, rebuilder, lessor, distributor, manufacturer, and transporter||$100,000||$750-$1,500||$1,000-$3,000||$2,500-$5,000||$5,000-$10,000|
Can I get bonded with bad credit?
If you struggle with problematic finances, you still have a chance to get the bond you need with Lance Surety Bonds. We run our Bad Credit Surety Bonds program for dealers with low credit scores, tax liens, bankruptcies, and civil judgements.
The bond premiums are higher, so that they can compensate for the increased bonding risk. You can expect a rate of about 5%-10%. As we work with a number of A-rated, T-listed surety companies, we will still offer you a top price that is in line with your specific situation.
How do I apply for a bond?
You can learn more about how bonding works on our How to Get Bonded page. If you have any questions or need help with your application, don’t hesitate to call us at (877) 514-5146. We’re here to assist you.
What happens in case of a bond claim?
Your dealer bond serves as an extra layer of protection for your customers rather than protecting your business. This means that if you fail to follow the law, you can face a claim on your bond. Affected parties can seek a reimbursement up to the penal sum of your bond. In the case of Nevada, this can be $10,000, $50,000, or $100,000, depending on the bond amount you were required to post.
If the claim is proven, you will have to compensate the claimants. Your surety may take over the costs at first, but you have to repay it fully afterwards. This means that claims are a serious financial threat and can prevent you from getting bonded in the future as well.
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