Pennsylvania Motor Vehicle Dealer Bond

The total values of the bond mentioned above refer to the maximum compensation a dealer may have to pay in case of a valid claim, but they are not the amount required from them in order to get the bond they need.

Instead, motor vehicle dealer bonds are paid for in annual premiums. They can be as little as 1% - 3% of the total bond value if the applicant has good credit. Surety bond companies consider credit score very important for the underwriting process. They can also consider other factors, such as the applicant’s financial strength or industry experience. Here is a breakdown of bonding cost based on credit score.

If you wish to learn more about how your rates are determined, check out our What Does a Surety Bond Cost? page.

Applicants with bad credit, no credit history, or other issues in their report are considered higher risk for bond underwriters, which is why they usually pay higher premiums, generally between 4% and 10%. Certain applicants can have a hard time getting bonded.

Lance Surety Bonds has an exclusive bad credit bonding program to make sure you still get your bond at the lowest possible rates, and by the same strong underwriters. Our surety bond experts will also give personalized advice on what to include in your application in order to make it stronger.

Applying for your surety bond has never been easier. All you have to do is submit our online application, where you will be asked to select the type of bond and its total value, as well as some complementary information about your business.

We will be in touch with you with a free no-obligations bond quote, along with assistance on completing the rest of the application process. The bond underwriter will ask you to sign an indemnity agreement.

Processing times can vary, but it usually takes no more than a few business days to get your bond ready after the payment of your premium.

Motor vehicle dealer bonds in Pennsylvania need to be renewed yearly in order for you dealer license to remain in force. The renewal process is quick and easy.

For all of our clients, we send several reminders ahead of the deadline, so you can focus on your business and not legal compliance. You can expect more or less the same premium, although changes in your credit report of financial statements can also be factored in so you can get an even lower renewal quote.

There are a number of important requirements that you need to fulfill in order to successfully file your application. Here is a brief overview:

• Proof of zoning compliance
• Certificate of Occupancy from the Department of Labor and Industry
• Ownership or lease documentation for your business premises
• Photographs of your premises and business lot
• Payment of all applicable fees
• Submission of a criminal and background check
• Submission of the original bond form

Don’t forget to contact the Department of State for a full list of pre-licensing requirements. You can also consult our blog post on the topic of getting licensed in Pennsylvania.

You need to read the bond language, as well as all applicable legislation, thoroughly in order to run your business in such a way so as to avoid a claim. You should also hold regular training session for your salespeople and other staff.

The importance of avoiding claims cannot be stressed enough. They can be detrimental to the reputation of your business and cost you a lot in terms of money and time. If you get into a dispute with a client, attempt to settle it out of court.

If this is not a possible scenario, make sure you keep all documentation and communication with the client. The surety bond company may ask you to present it, and if they believe you have the stronger case, they may help you argue against the claimant.