DefinitionWhat this category covers.
A car dealer bond is typically a license bond required by a state motor vehicle agency before a dealer license can be issued or renewed. It helps protect customers and the state if covered dealer-law obligations are not met.
Who typically needs it
New, used, wholesale, motorcycle, ATV, and other motor vehicle dealer applicants depending on state and dealer type.
What changesState, obligee, and amount details matter.
Dealer type, bond amount, obligee, and form language change by state. Start from the state motor vehicle agency notice rather than assuming one national amount.
Pricing & issuanceTypical cost and timing.
These are common ranges, not a quote. The premium is what you pay; the bond amount is the required coverage.
License Bond
- Small bonds (under $25,000): Typically $100–$250 per year (flat fee)
- Larger license bonds: Commonly around 1–5% of the bond amount annually
- Credit impact: Good credit: starting around 1–2% · Average credit: typically 2–4% · Credit challenges: often 4–5% or higher
Timeframe: Issuance timeframe varies by bond type and underwriting