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Florida Motor Vehicle Dealer Bonds


What is a Florida Motor Vehicle Dealer Bond?

An surety bond is a licensing requirement for every motor vehicle dealer licensee in Florida. The Department of Florida Highway Safety And Motor Vehicles will not issue a license until they have a surety bond, or auto dealer bond, on file.

An auto dealer bond is a type of insurance contract acting as a personal guarantee that you will follow all Florida dealership licensing and business rules, requirements, tax laws, and provide your customers with honest and ethical business services.

When you purchase an auto dealer bond, you're making this guarantee to the Florida Highway Safety and Motor Vehicles Department and your customers.

Get a Free Quote for Your Florida Motor Vehicle Dealer Bond Today

Used (Independent) Motor Vehicle Dealer Bond

$25,000 Bond

Expires 4/30

Mobile Home Dealer or Broker Bond
Recreational Vehicle Dealer, Manufacturer, Importer or Distributor Bond
Wholesale, Salvage or Auction Dealer Bond

$25,000 Bond

Expires 4/30

New (Franchise) Dealer or Service Facility Bond

$25,000 Bond

Expires 12/31 Annually

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Who Is Required To Purchase an Auto Dealer Bond In Florida?

Florida requires every licensed dealer to have an active auto dealer bond on file with the Department of Florida Highway Safety and Motor Vehicles.

Here are the licenses classifications and their required bond amount:

License Classification Bond Amount Click for Free Quote
Franchised Dealer $25,000 Click for Free Quote
Franchised Service Facility $25,000 Click for Free Quote
Independent Dealer $25,000 Click for Free Quote
Wholesale Dealer $25,000 Click for Free Quote
Auction Dealer $25,000 Click for Free Quote
Salvaged Dealer $25,000 Click for Free Quote
Mobile Home Dealer $25,000 Click for Free Quote
Mobile Home Broker $25,000 Click for Free Quote
New/Used Recreational Dealer $10,000 Click for Free Quote

Mobile home dealers with more than 4 supplemental locations require a $50,000 dealer bond.

Recreational dealers with more than 4 supplemental locations require a $20,000 dealer bond.

Every Florida License is Independent

Every type of dealer activity is independent requiring its own application process and surety bond, except recreational vehicle dealers.

Recreational dealers are allowed to sell both new and used vehicles. Compare this to a Franchised dealer who must get an Independent dealer licensed to sell used vehicles.

Finally, a Service Facility license is only available to a Franchised dealer.

Why is a Florida Motor Vehicle Dealer Bond Required?

One of the responsibilities of the Department of Florida Highway Safety and Motor Vehicles is to protect the public by providing common rules for operating the different types of dealerships in Florida. This is why all dealers must be licensed to legally sell, auction, and service vehicles.

Even with these laws in place, there will be a few dealerships who make poor decisions on purpose, financially harming their customers or the Florida Department of Revenue.

Examples of these purposeful acts of misconduct and fraud can include:

  • Improperly transferring a title
  • Selling vehicles with no title or a false title
  • Misrepresenting vehicle information like milage, manufacture year, or condition
  • Lying about accident history or structural work history
  • Stealing customer deposits
  • Choosing not to pay the sales taxes to the Georgia Department of Revenue

The auto dealer bond is your commitment and guarantee, that you will follow the rules, provide your customers with the best service, and pay your taxes on all sold cars and merchandise.

How Much Does a Florida Auto Dealer Bond Cost?

The cost of a Florida auto dealer bond is determined by a custom rate, quoted by a surety.

A surety is the insurance company that writes surety bonds. And similar to shopping for "traditional" insurance, the surety will determine a rate based primarily on these three factors:

  • Personal credit of the owner or all owners
  • Business industry and dealership experience
  • Prior bond claims if an owner was previously licensed with bond claims

Even though each surety will use similar factors to determine a rate, each surety weighs these factors differently.

This means rates will vary and the final price of a Florida auto dealer bond can vary. We've seen bond rates so different, it's saved our customers a hundreds of dollars.

How To Avoid Overpaying for a Florida Auto Dealer Bond

To avoid overpaying for your auto dealer bond, it's best to use a specialized surety agent like Surety Bonds Direct.

We work with multiple A-rated sureties to price shop for you and find the lowest rate and price we can. Using an A-rated surety means we can guarantee your bond will be accepted by the Department of Florida Highway Safety and Motor Vehicles.

Let's look at the $25,000 bond amount for pricing examples. The rates in the table are from really good to average:

Bond Amount Rate Price
$25,000 0.5% $125
$25,000 1.0% $250
$25,000 1.5% $375
$25,000 2.0% $500

But the only way to know your pricing is to request a free quote and get your pricing. There's no cost to have a bond specialist collect rates and find you the lowest pricing. And there's no obligation to purchase either.

Our price quotes are valid for 30 days. And once you have pricing, you'll be able to make the right decision for your dealership and timeline.

How Long Does a Florida Auto Dealer Bond Last?

Florida has a dealer license with set expirations. The Florida auto dealer bond mimics these license expirations.

Here are the license and bond expiration dates for each license:

License Classification Bond Term
Franchised Dealer May 1 - April 30
Franchised Service Facility May 1 - April 30
Independent Dealer May 1 - April 30
Wholesale Dealer May 1 - April 30
Auction Dealer May 1 - April 30
Salvaged Dealer May 1 - April 30
Mobile Home Dealer Oct 1 - Sept 30
Mobile Home Broker Oct 1 - Sept 30
New/Used Recreational Dealer Oct 1 - Sept 30

What Happens After You Purchase Your Dealer Bond?

When you work with Surety Bonds Direct, we handle filling out the dealer bond form for you. All you need to do is ensure you provide the exact same name for the surety bond as you used on the license application.

Florida allows us to email the bond to you. You're responsible for printing a copy of the bond to sign before you submit it with your application.

Renewing your bond before the expiration date is easy.

Your bond specialist will contact you 30 to 45 days in advance to make sure the renewal premium is paid on time so your bond remains active.

Once you pay the renewal premium, you don't have to do anything else. Your bond is active and you can continue selling vehicles.

Florida Dealer Bonds Are Continuous

A continuous bond is a surety bond that remains active as long as the renewal premium is paid each year.

This means, once you purchase and file your dealer bond with the Department of Florida Highway Safety and Motor Vehicles, you won't have to file another bond unless we find you a different bond that saves you money during renewal.

Motor Vehicle Dealer Bonds And Getting Your Florida Business License/Registration

Read our blog post that will take you through the steps to get the Florida dealer license you require to run your business.

At a high level, the pre-license steps are:

  • Get an FEIN number
  • Get a sales tax number
  • Complete the pre-licensing dealer class requirement
  • Submit electronic fingerprints

The main licensing steps are:

  • Complete the application using the information you got in pre-license steps
  • Purchase the required surety bond
  • Purchase the minimum liability insurance
  • Satisfy all of the location requirements

Additional Florida Motor Vehicle Dealer Bond Resources & Links

Florida Department of Highway Safety and Motor Vehicles Dealer Licensing Requirements

All Florida motor vehicle dealer bonds have set expiration dates regardless of when the surety bond is purchased during the year. The dates are as follows; April 30th for Motor Vehicle Dealers, December 31st for Franchise Dealers, and September 30th for Recreational Vehicle Bonds. Therefore, all the premium paid in the first year will be pro-rata based on the portion of the year the bond is active. The surety company can cancel this bond by providing 30 days written notice to the State of Florida Department of Highway Safety and Motor Vehicles.

If the dealership cancels its surety bond during a license year and obtains a replacement surety bond with another firm, the dealer must immediately provide the new original surety bond to the Motor Vehicle Field Operations, Regional Office responsible for regulating the dealership to show continuous surety bond coverage. Coverage gaps are not acceptable so the replacement surety bond must have an effective date on or prior to the cancellation date of the previous surety bond. Surety Bond Riders are acceptable to make any change or correction. A new bond or continuation certificate is required each year so coverage remains in force and effect subject to the statutes of limitations.

Obligee Address:

STATE OF FLORIDA DEPARTMENT OF HIGHWAY SAFETY AND MOTOR VEHICLES
2900 APALACHEE PARKWAY
ROOM A312, Mailstop #65
TALLAHASSEE, FLORIDA 32399-0500