South Dakota Motor Vehicle Dealer Bonds

Get a Free Quote for Your South Dakota Motor Vehicle Dealer Bond Today

Who Is Required To Purchase a South Dakota Vehicle Dealer Bond?

South Dakota has the following license classifications, each with its own bond requirement. Next to the license you'll see the required bond amount.

This amount is set by the South Dakota Motor Vehicle Division. I'll go into more detail about the bond amount, just know it's not the price.

• Motor Vehicle Dealer License - $25,000
• Motorcycle and Off Road Dealer License - $5,000
• Snowmobile Dealer License - $5,000
• Boat Dealer License - $20,000
• Trailer Dealer (over 3,000 pounds) - $10,000

If you're obtaining a motor vehicle dealer license you'll be licensed to sell not only cars and trucks, but motorcycles, off road vehicles, and trailers.

Why is a South Dakota Motor Vehicle Dealer Bond Required?

As you know, there are a lot of different licensing requirements. This surety bond is only one of these requirements.

Besides the surety bond requirement, the licensing process includes requirements like:

• Getting zoning approval from the city or county you're located in
• Providing a copy of the lease or deed for your property
• Purchase the required minimum insurance policies
• Passing criminal background check

And now you know this surety bond is your legally backed guarantee that you will operate your business according to Pennsylvania law and conduct business with your customers using fair and ethical business practices.

The Motor Vehicle Division requires all dealers to purchase this surety bond for the protection of the customers the dealers serve and to ensure sales taxes are paid. It's primarily for your customer's protection.

What Specifically Does the South Dakota Auto Dealer Bond Protect Against?

Despite going through the licensing process, securing a dealership location, and securing inventory, every year there will be a small number of licensed dealers who purposefully and financially harm their customers to make more money.

These fraudulent actions can include things such as:

• Improperly transferring a vehicle title
• Selling vehicles with no title or fabricated titles
• Lying about vehicle condition, accident history, or milage
• Stealing from customer deposits
• Failing to record all vehicle sales or failing to pay the correct amount of sales tax

If a dealership is found guilty of these actions or similar actions, a claim can be made against the surety bond for damages.

This is where the bond amount comes in. The maximum amount of financial compensation for any one claim or the sum of multiple claims is capped at this bond amount.

As you can see, this protects customers from being financially harmed by a dealership and it also protects the Department of Revenue from a dealership failing to pay appropriate sales taxes.

How Much Does a South Dakota Auto Dealer Bond Cost?

Purchasing a surety bond is not complicated. The high level process is:

• Get custom pricing based on your business
• Purchase the bond with the correct information
• Have your bond issued so you can submit it with your application

Step 1: Get Your Custom Vehicle Dealer Bond Pricing

Pricing for a bond is determined by a surety. A surety is a specialized insurance company that underwrites vehicle dealer surety bonds.

Custom pricing is determined by the surety looking at these 3 factors:

• The personal credit of the owner or owners
• Dealership experience and industry experience
• Any prior bond claims if you've had a dealership in the past

From these factors a rate is determined and this rate multiplied by the bond amount you need is the price you'll pay.

This price is one payment for the bond term of 12 months in South Dakota.

We are Surety Bonds Direct, a specialized surety agency. We work with the highest A-rated sureties to find our customers the lowest rate and price.

We don't even understand it but different sureties will quote vastly different rates. This will impact your price by hundreds of dollars.

Here is example pricing for the $25,000 dealer bond with rates we routinely see offered by different sureties. Notice how much the pricing changes.

Click here and start the online quote process. It takes 90 seconds to submit your request.

If you prefer to speak with a bond specialist, you can call 1-800-608-9950.

Step 2: Purchase Your Vehicle Dealer Bond

When you request pricing from us, your quote is good for 30 days.

So while there's no rush to purchase your bond immediately, it's often a good idea to get this done so you're not waiting on it to submit your application.

Purchasing is as simple as completing an online purchase form or ordering over the phone.

Step 3: Have Your Vehicle Dealer Bond Issued

After your payment is processed, our bond issuance team will work on issuing your bond with the correct information including the:

• Correct bond form required by the Motor Vehicle Division
• Required signatures and seals
• Power of attorney

Your surety bond will have to be mailed to you. The Motor Vehicle Division requires the original bond to be filed with your application.

This will add an additional 3 to 5 business days for shipping. And this is another great reason to check-off the surety bond requirement when you start your application process.

You don't want the bond to be the last requirement you have to check-off and have to wait for shipping.

Renewing Your Auto Dealer Bond

As we've mentioned, your bond will expire one year (12 months) from the active date you choose when you purchased your bond.

At this one year mark is when you'll need to renew your bond to keep it active for the following 12 months.

We handle this process for you. You'll receive an email and call from your bond specialist 30 to 40 days before your bonds expiration date with renewal pricing ready to go.

Once you pay the renewal premium, your bond remains active.

You don't have to worry about having another bond issued. The initial bond you filed with our application will remain active year over year as long as the renewal premium is made on time.

Motor Vehicle Dealer Bonds And Getting Your South Dakota Business License/Registration

Each license classification has the same high level steps for obtaining your license. These steps include:

1. Obtaining approval for your dealership zoning
2. Providing a copy of the lease or deed for the property
3. Purchasing your surety bond and minimum liability insurance
4. A copy of a franchise agreement if you're selling new vehicles
5. Plus making sure you meet all the requirements for your dealership location

Remember, it's best to get your surety bond pricing today. You'll have the exact price so you can plan accordingly. Keep in mind as well, your bond must be mailed to you after you purchase which will take a few days. Do not wait until the last minute to get this process done.

Overall you expect your auto dealer bond to be in the mail within 1 to 2 business days after you purchase.

Click here and start the online quote process. It takes 90 seconds to submit your request.

If you prefer to speak with a bond specialist, you can call 1-800-608-9950.