Washington Auto Dealer Bond

Washington’s state law requires you to have a $30,000 motor vehicle dealer bond for new or used vehicle dealers. This bond must be renewed annually. If a claim is made against your auto dealership, the bond amount is the maximum financial protection available to the claimant. 

While the state requires auto dealerships to have a $30,000 bond, you don’t need to pay this entire amount to comply. You’re only required to pay a bond premium to your bonding company.

What factors impact the cost of your Washington auto dealer bond? The bonding company assesses its risk for underwriting your bond. A major component of this risk is your personal credit score.

If you have a credit score over 700 and no other significant risk factors, your bond premium may be between 1% and 3% of the required $30,000 bond, that means you’ll only have to pay a minimum of $300. See the table below for additional pricing information.

For more information be sure to check our "How Much Does a Surety Bond Cost?" guide.

1. Apply for Your Bond

To start the bonding process with us, complete our online application at your convenience. This application can be completed in only a few minutes. However, we may require additional information to better understand the bonding risk and provide firm pricing.

One of our recent clients was opening a new dealership in Washington and was concerned about the daunting application process for a motor vehicle dealer bond. We supported the client with step-by-step assistance, ensuring that they meet the bond requirement for a Washington auto dealership license. 

2. Get a Quote

We review all dealership bond applications promptly. Soon after submitting your application online, we’ll be in touch with a free bond quote. 

We utilize our extensive knowledge and experience to identify the best rate for every client. After approving the rate provided to you, you’ll receive personalized assistance from us to complete the bonding process.

3. Purchase Your Bond

The final step to set up your vehicle dealer bond is to pay the premium. Within a day or two after making your payment, your bond will be ready. We’ll email the bond to you, or we’ll mail you a paper copy upon request.

We work hard to deliver a streamlined bond application experience for our customers. If you need assistance with the online application or have questions, contact us at (877) 514-5146.

The auto dealership bond requirements in Washington are established by state law. Proof of bonding is needed by the Washington State Department of Licensing as part of the dealership license application process.

Specifically, you must purchase a bond from a bonding company before submitting your license application. Your credit score and financial health will be assessed by the bonding company. Both your approval for an auto dealership bond and the pricing are impacted by these factors. 

Washington's vehicle-related businesses must adhere to diverse licensing and bond requirements. Key bonds include the $30,000 Motor Vehicle Dealer Bond for those selling new/used cars, trucks, or motor homes; the $1,000 Motor Vehicle Wrecker Bond for dealing in wrecked vehicles or parts; the $5,000 Vessel Dealer Bond for dealers selling over 15 vessels annually, valued over $2,000 each; the $5,000 Registered Tow Truck Operator Bond for businesses handling unauthorized or abandoned vehicles; the $20,000 Travel Trailer Manufacturer Bond; and the $40,000 Mobile Home Manufacturer Bond. 

When applying for your Washington auto dealership license, you must provide the bonding company’s form or the Motor Vehicle Dealer Bond form to the State Department of Licensing. The business owner’s name, business firm name and principal name must match exactly on the document. 

In addition, the bonding company’s attorney-in-fact and the applicant must sign the document.

Your Washington dealer bond must be renewed annually no more than 45 days before the bond’s expiration date. The renewed bond documentation will be submitted to the Washington State Department of Licensing with your dealer license renewal application and documentation.

Renewing your motor vehicle dealer bond is easy to do. Your bond company will contact you when the renewal date is approaching. You’ll receive an updated premium for your bond renewal. Once the premium is paid, the bond will be renewed for the next year.

It’s best to avoid a bond claim if possible, such as through an out-of-court settlement. Claims can be expensive, and they increase the difficulty of getting a bond at the next renewal. 

Lance Surety Bonds will investigate any claims made against your bond. Payment to the claimant will only be made if the claim is deemed valid after the investigation. Should that happen, you will be liable to reimburse the surety up to the penal amount of your bond.

To obtain your Washington motor vehicle dealer license, you must submit the following documentation:

• Property tax statement or rental agreement
• A Washington surety bond
• Business License application form
• Business Licensing Service application formVehicle Dealer/Manufacturer Addendum form
• A criminal background check and fingerprints
• Certificate of Dealer Education, applicable only for used-car dealership
• Fees: $975 yearly license fee, $38.75 dealer plates fee (each)
• Building codes and zoning paperwork
• Business entity documentation
• Proof of a business sign and phone line
• A financial statement 
• E-permits

Apply online through the Department of Revenue. You can also mail your application, documentation and fees to:

State of Washington

Business Licensing Service

P.O. Box 9034

Olympia, WA 98507-9034