Maine Motor Vehicle Dealer Bonds

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Who Is Required To Purchase a Maine Auto Dealer Bond

The Maine Bureau of Motor Vehicles sets the bonding requirements for each license type or classification.

Every dealer type except for an equipment dealer and light trailer dealer is required to purchase an auto dealer bond before a license is issued.

Unlike most states, Maine does not have one set bond amount for licensed classifications. Rather it's going to be based on sales volume.

 

What Are the Bond Amounts For Maine Vehicle Dealers?

Your bond amount is going to be based on sales volume from the prior year.

If you're a brand new dealer with no sales, you'll give your best projection to determine your bond amount. And as a new dealer you're subject to reviews based on the volume of vehicles being sold.

Here are the bond amounts based on sales volume:

I'll mention this again, but every year during license renewal you'll have to adjust your bond amount as appropriate.

This bond amount is the total amount of financial compensation available to:

• A customer if they were purposefully and financially harmed by a dealer
• The Maine Revenue Services if a dealer did not pay the appropriate amount of sales tax on vehicles sold

 

Why is a Maine Motor Vehicle Dealer Bond Required?

Getting licensed as a dealer is required to legally sell vehicles in the state.

And the licensing process is a set of requirements qualified dealers must meet. However, just because a dealer obtains a license does not mean they'll always follow the law.

Every year there will be some licensed dealerships who will deliberately and financially harm their customers to increase profits.

Examples of these fraudulent actions include:

• Transferring a vehicle's title incorrectly
• Failing to transfer the title at all
• Selling vehicles with a missing or fake title
• Lying about a vehicle's mileage, manufacture year, or condition to make a sale
• Stealing customer deposits
• Neglecting to pay the correct sales tax amounts and pocketing the difference

If a customer or the Maine Revenue Services (in the case of failing to pay sales tax) is harmed by one of these or similar actions, they can make a claim against the dealership for financial compensation.

This claim can only be an amount equal to or less than the bond amount and the claim must be validated as a legitimate claim.

Your bond amount will also determine the price you're going to pay.

 

How Much Does a Maine Auto Dealer Bond Cost?

Maine auto dealer bonds are called a credit drive bond. This means each applicant is going to be quoted a unique rate primary based on:

• The credit of the owner and/or all owners
• Dealership business industry and experience
• Prior bond claims from previous licenses if applicable

This rate is determined by a surety. A surety is a special type of insurance company that underwrites surety bonds for auto dealers.

The rate a surety quotes multiplied by the bond amount is the price you'll pay.

 

How You Can Save Hundreds Of Dollars Purchasing Your Auto Dealer Bond

Every surety is different in how they weigh the above factors to determine the rate they'll quote.

Surety Bonds Direct is a specialized surety agency. This means we have relationships with the top A-rated sureties to help you find the lowest possible price and help you purchase a surety bond.

We've seen rates come back for the same bond and applicant, one to three percentage points different.

This means the lowest rate can save you hundreds of dollars.

 

Example Pricing For a Maine Auto Dealer Bond

Let's look at some example pricing so you can see how big of a difference a one to three percentage point difference in the rate has on the price.

 

Get Your Pricing In Less Than One Business Day

We will get your exact pricing in less than one business day.

There's no cost to have us price shop for you and you're under no obligation to purchase once you get pricing.

Plus, price quotes are good for 30 days so you can purchase when the timing is right for you.

Click here to start the quote process. Starting your quote today means you can have exact pricing in one business day.

Once you receive your pricing, you'll be able to make the right decision for your business and goals.

 

How Long Does a Maine Auto Dealer Bond Last?

Maine requires a yearly renewal based upon the date you received your approval for licensure.

Remember, not only do you have to go through the renewal process, but you may have to change your bond amount based on the total vehicles sold the previous year.

This is another great reason to work with a surety agency like Surety Bonds Direct.

You get assigned a bond specialist who will have pricing ready for the possible bond increase or decrease scenarios.

 

Renewing Your Bond

Renewing your bond simply requires you pay the renewal premium.

This is another reason to work with a surety agency like Surety Bonds Direct. As our customer, you're assigned a bond specialist who will manage your bond for you.

Your bond specialist will contact you 30 to 40 days in advance of expiration to remind and help you get the bond renewal completed.

We'll alter your bond as needed and make sure it remains active by issuing you a continuation certificate.

 

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

Maine has a good outline of all the requirements on the Bureau of Motor Vehicles website.

At a high level, the steps are:

1. Choosing the appropriate dealership name
2. Setting up your dealership property and choosing the correct hours
3. Setting up the business office appropriately
4. Purchasing your surety bond
5. Having your dealership inspected by a field investigator
6. Obtaining the necessary liability insurance
7. Submitting the application and paperwork