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Iowa Motor Vehicle Dealer Bonds

What is an Iowa Motor Vehicle Dealer Bond?

Licensed auto dealers in Iowa must post a $75,000 surety bond in order to legally operate in the state. The surety bond is in favor of the Iowa Department of Transportation.

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Why is an Iowa Motor Vehicle Dealer Bond Required?

The bonded principal agrees to comply with the statutes of the State of Iowa pertaining to and regulating motor vehicle dealer business. Any individual who purchases a motor vehicle from the dealer and sustains losses or damages resulting from the dealer’s failure to comply with the provisions of the Code of Iowa, Chapters 321 and 322, shall be indemnified by the surety company and the bonded principal. Dealer responsibilities covered by this surety bond include (but are not limited to) furnishing a proper and valid Certificate of Title to the motor vehicle involved in a transaction. The aggregate liability shall not exceed the amount of the bond during any one license year.

The bond may be canceled by the surety company at any time by providing 30 days advance written notice to the Iowa Department of Transportation.

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

The following is an overview of the key motor vehicle dealer licensing requirements in Iowa.

  • Completed application
  • Established, separate place of business
  • $75,000 surety bond
  • State corporate requirements
  • Pass on-site inspection
  • Pre-licensing training
  • Liability insurance coverage
  • Payment of licensing fees
  • Additional items may be needed and exact requirements may vary based on applicant, license type or obligee discretion. Please see obligee and state links in the Other Helpful Information and Links section below or contact the obligee directly for more information.