What Is a Mississippi Wholesale Dealer Bond?
In order to obtain a Mississippi wholesale dealer license, you have to undergo a rigorous process with state authorities. Among the requirements you have to meet is to post a wholesale dealer bond.
Similarly to other auto dealer bonds, your surety bond aims to protect the state and your customers from potentially harmful or fraudulent practices you may engage in. In a sense, it functions as a safety net.
Your wholesale dealer bond is a contract between your business as the principal and two more parties. The Mississippi Department of Revenue is the obligee that imposes the bonding. The third entity is the surety which provides you with the bond.
Questions about Wholesale Dealer Bonds in Mississippi
When do I need to obtain this wholesale dealer bond?
The Mississippi Department of Revenue requires all wholesale dealers to post a surety bond during their licensing process. Previously, only new car dealers had to obtain bonding, but as of 2015, used and wholesale license types are included in this requirement as well. The amount is $25,000. The bond ensures your compliance with the Mississippi Administrative Code.
What’s the bond cost?
The bond amount that you have to post as a wholesale dealer is $25,000. The bond premium that you have to pay in order to get bonded is a small fraction of this amount. It is based on an assessment of your personal and business finances.
The formulation of your surety bond cost depends on a number of factors, such as your personal credit score, business finances, liquidity and assets, and even your business knowhow. By examining carefully these criteria, your surety can estimate the level of bonding risk involved. Applicants with stable finances usually get a bond rate of about 1%-5%.
|Surety bond name||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Mississippi wholesale dealer bond||$25,000||$187.5-$375||$250-$750||$625-$1,250||$1,250-$2,500|
Is it possible to get bonded with bad credit?
Lance Surety Bonds has designed a special program for applicants struggling with a low credit score, tax liens, bankruptcies, or civil judgements. If you are facing such financial issues, you can benefit from our Bad Credit Surety Bonds program.
Since the bonding risk is higher in such cases, the bond premiums are slightly higher - in the range of 5% to 10%. However, we are still able to offer you a great bonding option. Due to our exclusive partnerships with a number of A-rated, T-listed surety companies, you can get a top bond rate with us.
Interested in learning more about the bonding process? We have created an in-depth resource on the topic in our How to Get Bonded page.
Our bonding experts are available to answer your questions and to help you with your bonding application. You can reach us at (877) 514-5146.
How are bond claims handled?
Unlike insurance, the surety bond that you are required to obtain as a wholesale dealer functions as a protection mechanism for your customers. If you fail to abide by the Mississippi Administrative Code and other applicable laws, you can receive a claim against the bond. This is how harmed parties can demand a financial compensation.
The reimbursement that claimants can seek is up to $25,000, which is the maximum penal sum of your bond. On proven claims, you have to fully cover the costs. The surety may step in to ensure a fast compensation, but you are liable to repay it soon after. As a result, bond claims are to be avoided, as they can lead to financial losses, as well as to problems with your business reputation.