Nebraska auto dealer licenses expire every calendar year on December 31st. This means you're required to obtain a new license with an inspection of your dealership according to the Nebraska Motor Vehicle Licensing Board.
Wether you've been in business for years or you're new to the auto dealer business, it's good to go over the Nebraska auto dealer license requirements so you can obtain your new license for the upcoming year with ease.
In this article, you'll learn:
- All the requirements on the Nebraska license form.
- The details of obtaining a new auto dealer surety bond.
- The process once your application is submitted.
- What could go wrong as an auto dealer which could cause a complaint or claim against your dealer bond and potential loss of your dealer license.
- How to get your new dealer bond in 48 hours or less.
The Nebraska Auto Dealer License Requirements
The full details of each requirement is on the license application which you can find here. Click on Dealer Bond for the current PDF document. Here are the important points you should keep in mind:
This is only applicable if you're opening a new dealership or changing the name of your current dealership.
Your name is not allowed to have the following words in it:
- For Less
- Or similar statements
I can't be sure why these naming conventions are in place, but I would suspect these are general marketing terms all car dealerships use. For example, if you're trying to move prior year vehicles, you might advertise:
- "Heavy Discounts..."
- "Last Year Toyotas For Less..."
Unique business names can be trademarked. Names with common language, like these terms, cannot be. This is likely the reason Nebraska flat out does not allow these common terms in the name of auto dealer businesses.
Your Dealership Property
The property that holds the cars must have at least one contiguous area to display up to:
- 10 cars
- 10 motorcycles
- 10 trailers
To legally sell vehicles, you will have to meet this contiguous area requirement.
The letters on your sign must be a minimum of 8 inches in height and the sign must be permanent. Permanent means, the sign is cemented into the ground. Finally, the sign must be visible from the road.
Hours of Operation
Dealerships must be open at least 40 hours per week with at least half of these hours (20 hours) being between 8am to 5pm.
Dealerships are required to have liability insurance unless you deal only with trailers. You're also required to have workers compensation insurance.
Liability insurance helps protect the dealership when cars are driven by a potential customer for a test drive. Plus protecting customers on your property from accidental injury.
Learn more about the insurance requirements for most auto dealers.
Auto Dealer Surety Bond
All Nebraska auto dealers are required to purchase and post, with your dealership application, a $50,000 auto dealer bond.
If you have multiple dealership lots in the same county, you can set it up as a "supplemental location" and the lot will be included under the same $50,000 bond.
If your additional lots are in other counties, each lot in a different county will need to post its own $50,000 bond.
If a bond is issued by an out of state "agent" providing surety bonding services, a copy of the Nebraska Producers License needs to accompany the bond. Surety Bonds Direct is capable of providing you with a copy of the Nebraska Producers License.
How Much Does An Auto Dealer Bond Cost?
As we've mentioned, Nebraska auto deal surety bonds have a value of $50,000.
What you pay for a surety bond is called a premium. This is similar to insurance and your premium is based on personal credit, the financial history of the dealership, and the credit of your business.
If you're opening a new dealership, your premium is based on your personal credit and years of experience in the industry.
Every year you will be able to get a new quote when your license expires and you have to go through the process again. Don't worry, it's a fast process.
At Surety Bonds Direct, we will help you get the lowest possible rate so you pay a little as possible for your auto dealer bond.
Here's a table to help you get an idea of how much a surety bond costs:
|Bond Amount||Premium Rate||Total Cost|
Once you obtain your bond and complete your application, you will submit it with the Nebraska Motor Vehicle Licensing Board.
The Board will assign one of five field investigators to inspect your dealership. This investigator will make sure your property and business comply with all the above requirements for a dealership in Nebraska.
The Name On Your Bond and License
If you're applying as an individual or partnership (a non-corporate entity), you will list your personal name "doing business as" your business name. For example, "Jane Smith dba Luxury Used Cards"
If you're a business entity, you will list your name as the business entity on your bond and license. If your corporate name is a holding company and has nothing to do with cars, motorcycles, or trailers, you need to list the name of your entity and trade name ("doing business as") on the bond and license.
Once you obtain approval, you pay the license fee of $225 and you are good for the calendar year.
Not Sure What An Auto Dealer Surety Bond Is?
- What an auto dealership bond is.
- Why it's required to get your license.
- How much an auto dealer bond costs.
- And why the cost can vary based on your business.
What Is The Purpose Of An Auto Dealer Bond?
As an auto dealer, there's a lot of fraudulent behavior you could participate in.
This includes activities like:
- Changing out the car, motorcycle, or trailer to a different vehicle from the one your customer purchased.
- Failure to deliver a marketable title or falsifying titles.
- Rolling back odometers.
- Mishandling any funds that belong to your customer.
- Any attempt to deceive the purchaser as to the year or model of the vehicle they're interested in.
- Any false claims about your car, motorcycle, or trailer.
- Not paying taxes on your inventory or sales correctly.
- Not reporting sales accurately.
So an auto dealer bond protects the end customer from any negligence by the dealer.
A dealer surety bond also protects the state because the state is in charge of making sure you follow all of the license requirements listened above. Plus the state wants to collect their taxes owed.
If you break any of these license requirements or partake in any of these shady behaviors, a claim can be make against your dealership. If the claim is found to be legitimate, you will have to pay for the claim and in most cases, you'll have your license revoked.
Remember Every December 31st Your License Will Expire
Auto dealer licenses are good for one year. You will need to go through the process of obtaining a new (renewal) license each year. This allows the state to make sure you're following all licensing requirements. Plus it allows the state to inspect all dealerships on a regular basis.
When it comes time for you get your auto dealer bond, request a free bond quote for your Nebraska auto dealer bond. You can call us at 800-608-9950 and one or our bond experts will help you get your bond in one to two days.