What is a Utah Motor Vehicle Dealer Bond?
The Utah Vehicle Enforcement Division, part of the Tax Commission, set the laws and regulations for getting licensed as a vehicle dealer. There are a lot of requirements, and one of them, the surety bond, tends to be the most confusing for new dealers.
This surety bond, commonly called an auto dealer bond, is a legal contract you purchase as a guarantee that your business will:
- Follow all Utah laws and regulations for operating a vehicle based business
- Conduct business with your customers using fair and ethical business practices
- Pay sales tax on all vehicles sold
When you purchase your vehicle dealer surety bond and have your license issued, you are legally bound to these promises.
Click on your license classification below and get your custom pricing so you can get your bonding requirement done.
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Who Is Required To Purchase a Utah Auto Dealer Bond?
The Motor Vehicle Enforcement Division issues the following licenses:
- New and used vehicle dealer licenses (including motorcycle and off-highway vehicles)
- Body shop license
- Salvage buyer license
- Dismantler license
- Crusher license
- Dismantler and crusher license
- Vehicle manufacturer license
- Distributor and representative licenses
- Vehicle transporter license
- Sales person license
Of these classifications, the following have an auto dealer bond requirement with the following bond amount.
| License Classification | Bond Amount |
|---|---|
| Vehicle dealer licenses | $75,000 |
| Special equipment dealer license | $25,000 |
| Motorcycle, off-road vehicle dealer license | $10,000 |
| Small trailer dealer license | $10,000 |
| Vehicle crusher license | $10,000 |
| Vehicle body shop license | $20,000 |
These bond amounts are the maximum amount of financial coverage or compensation available to a customer who is purposefully and financially harmed by a business. The bond protection also extends to the Utah Tax Commission in the event you fail to pay sales tax.
Get Your Bond Pricing Today
You can get pricing for your Utah auto dealer bond today. Click the button below. You need to know the amount of your bond.
Need Help? Call Us Today
Talk to a bond specialist today. They will help you find the surety bond you need and get you the lowest possible price. 1-800-608-9950
Why is a Utah Motor Vehicle Dealer Bond Required?
The Motor Vehicle Enforcement Division requires this surety bond as part of the licensing process because it's the only way the state can hold business they issue licenses to accountable to the licensing laws.
The licensing process was created to identify the businesses that have the best chance of succeeding and offering quality services to the public.
However, even after meeting all of the licensing requirements and obtaining a license, every year there will be a small number of businesses that purposefully and financially harm their customers.
Examples of these acts of vehicle dealer fraud can include:
- Improperly transferring on title
- Selling vehicles with no title or fake 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 any of these types. of actions, a claim can be made against the dealer bond for financial compensation.
And just as we've mentioned, the bond amount is the maximum the compensation can be for any one or multiple claims against a surety bond.
So as you can see, vehicle dealers are required to purchase a surety bond as protection for their customers in the event they abuse their licensed status to illegally harm a customer.
How Much Does a Utah Auto Dealer Bond Cost?
Similar to a traditional insurance policy the price of a surety bond will be a small fraction of the required coverage amount. And in Utah, as in most states, motor vehicle dealers have to obtain a custom bond price.
It's a custom price because it will be determined primarily based on these three factors:
- Primarily 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
A surety, the insurance company that underwrites auto dealer bonds, will use these factors and determine a rate. This rate multiplied by the bond amount is the price you'll pay.
The price you pay is one payment for your bond term. You'll learn more about the bond term below, but in Utah it's June 30th to June 30th each year.
It doesn't matter where you get your surety bond, you will have to have a soft credit check of the business owners.
But this is also how you can save hundreds of dollars when you purchase your bond.
How To Save Hundreds Of Dollars Purchasing Your Utah Vehicle Dealer Bond
Each surety conducts their own assessment of an applicant using their own factors unique to them. And we see it everyday, rates for the same applicant routinely come back 1% to 3% different.
And this is what we do. We're Surety Bonds Direct, a surety agency, and we work with the highest A-rated sureties to find our customers the lowest price for their bond.
Here's some example pricing so you can see how much money you can save by getting the lowest rate.
Let's look at the most common surety bond amount of $75,000.
| Bond Amount | Premium Rate | Total Cost |
|---|---|---|
| $75,000 | 0.05% | $375 |
| $75,000 | 1% | $750 |
| $75,000 | 2% | $1,500 |
| $75,000 | 3% | $2,250 |
| $75,000 | 4% | $3,000 |
Find out how much money you'll save by getting your exact pricing today.
You can request a price quote and we'll go find you the lowest possible price at no charge to you. We only want a chance to earn your business.
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.
What Happens After You Get Pricing For Your Utah Vehicle Dealer Bond?
Once you get pricing and you're ready to purchase, you only need to complete an online order phone. You can also order over the phone if you prefer.
Once your payment is process, our bond issuance team will prepare your bond with the:
- Correct bond form required by the Motor Vehicle Enforcement Division
- Required signatures and seals
- Power of attorney so the bond can be enforced
After your bond is complete, you'll receive an email with your bond attached.
Utah will accept a copy of the bond, so email makes the process of getting your bond faster. If you want the original bond for your records, we can mail that to you.
How To Keep Your Auto Dealer Bond Active?
As long as you're in business you need to have an active surety bond on file with the Motor Vehicle Enforcement Division.
And as you probably know, in Utah all licenses expire June 30th of each year. Your surety bond will also expire on that same date at which point you'll renew your bond for the following year.
The good news is during your first year, the price of your surety bond will be prorated to that date.
As June 30th approaches, your bond specialist will reach out to you 30 to 45 days in advance of your renewal date to make paying the renewal premium easy.
They will have pricing ready to go so you can just pay the renewal premium and your bond will remain active. You won't have to re-file the bond.
Related Auto Dealer Licenses and Bonds
Many Utah dealers open dealerships in the neighboring states. We have helped Utah dealers with their:
Get Your Bond Pricing Today
You can get pricing for your Utah auto dealer bond today. Click the button below. You need to know the amount of your bond.
Need Help? Call Us Today
Talk to a bond specialist today. They will help you find the surety bond you need and get you the lowest possible price. 1-800-608-9950
Motor Vehicle Dealer Bonds And Getting Your Utah Business License/Registration
Getting your Utah vehicle dealer license has a lot of requirements, but the process is straightforward. Here are the steps at a high level:
- Complete the business application
- Meet all of the requirements for your place of business
- Submit the required photographs for your location
- Ensure you have your business sign meeting the sign requirements
- Get your sales tax license so you can collect taxes on sold vehicles
- Purchase the auto dealer bond
- Submit your fingerprints for a background check
- Register your business and show proof of registration
- Pay all required fees
- Decide how many dealer plates you'll need and complete the application for them
The surety bond process will take at least one business day, two at the most. Do not push your bond off as the last requirement to hit.
Get your bond done today so you can have it checked off and you're not left rushing at the last second.
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.
Additional Utah Motor Vehicle Dealer Bond Resources & Links
BOND OF MOTOR VEHICLE DEALER, SPECIAL EQUIPMENT DEALER, CRUSHER OR BODY SHOP
Your dealership application requires a surety bond called an auto dealer bond. Learn what this bond is and how to buy it for as little as possible!
Learn the auto dealer bond requirements in Arizona. You'll learn your bond amount and how much it will cost for you. Then you can get this process done.
What is the Colorado Auto Dealer Bond?
Colorado requires all auto dealers to purchase a surety bond. Here's what this bond is and how to purchase it for less.
How Much Does An Auto Dealer Bond Cost?
Click here if you don't know what an auto dealer bond is.
The price of an auto dealer bond is determined by a surety.
A surety is an insurance company that specifically underwrites surety bonds. (Not all insurance companies provide surety bonds.)
Every surety does their own - independent - assessment when providing a rate for a surety bond.
This means you'll get a different price from each surety.
And this means the lowest rate can save you hundreds of dollars.
How is an Auto Dealer Bond Price Determined?
All states (except Ohio) require a custom rate quoted by a surety to determine exact pricing.
The rate quoted by a surety are based on:
- Credit of the owner or owners
- Industry and business experience of the business
- Any prior bond claims if there are any from previous licenses held
- Plus the overall landscape of the dealership claims in the state
Using a specialized surety agency like Surety Bonds Direct will save you money.
How Much Money Will You Save?
We work with our network of proven, A-rated sureties to price shop for you and find the lowest possible price.
The best part is, you're under no obligation to purchase once we find you pricing.
Having helped thousands of auto dealers across the country...
The price difference between rates can be hundreds of dollars.
**With the money you save, you can pay:
- Application fees
- Examination fees
- Additional insurance costs like liability insurance
- Other fees or costs to get your business up and running
Purchasing an Auto Dealer Bond Is Easy
If you agree to the low price we find you, purchasing your surety bond is as easy as completing an online checkout form.
After a successful purchase, our issuance team will:
- Prepare the correct bond form
- Collect the necessary signature
- Ensure the seals are in place
- And provide the power of attorney
Some auto dealer bonds must be physically mailed to you so you can turn in the original bond.
Most auto dealer bonds can be emailed to you so you can submit a copy of the bond.
Let Us Manage This Process For You And Save Your Money!
If this is your first time purchasing an auto dealer bond, the concept may be new to you.
Let's us manage the process for you so:
- You do not overpay for your surety bond
- Get the process done quickly and correctly
If you know the bond you need, click here and choose your state to get started.
If you're unsure of the bond you need, fill out our free online quote form and provide as much details as you can.
Our system will find the bond you require or a bond specialist will call you can help you get this process done.
What Causes Dealer Bonds To Increase?
Have you been notified that your auto dealer bond amount has increased?
It's never fun having to purchase a surety bond, especially when you're required to pay more out of the blue.
So why does an auto dealer bond amount increase?
State Requirement Increase
Why Do You Need An Auto Dealer Bond Recap
Auto dealer bonds are required because every year there are a small number of licensed dealers who commit some form dealer fraud.
Examples of auto dealer fraud include actions such as:
- Lying about odometer readings or vehicle history
- Failing to deliver a vehicle title
- Creating a fake title to get a vehicle sold
- Failing to pay sales taxes on vehicles sold
- Plus potentially a lot more
The difference is these actions are committed on purpose to make more money by the dealer.
Click here and watch our auto dealer bond video
It's because of these dealers that you are required to purchase a surety bond.
And this is also why bond amounts increase.
Increases In Fraud
If there are continual increases in fraud complaints by consumers, the state will reevaluate the bond amount.
Based the types of complaints, it's possible they may decide to increase the bond amount.
Keep in mind, this requires an amendment to an existing law, so the process is not immediate.
Inflationary Pressure
Because vehicles cost more and the damages of being harmed by a dealer can be greater, the bond amount needs to keep up with these rising costs.
State governments tend to updates bond amounts every 6 to 10 years.
Individual Dealership Increases
Some states have different bond amounts based on how many vehicles you sell during the previous calendar year.
If your business is growing and your helping a greater number of customers, the state will require a larger bond.
Essentially because you're working with more people, there is more risk that an negative event could happen.
These are the reasons why auto dealer bond amounts increase.
Get Your Bond Pricing Today
You can get pricing for your auto dealer surety bond. Click the button below. You need to know the amount of your bond.
Need Help? Call Us Today
Talk to a bond specialist today. They will help you find the surety bond you need and get you the lowest possible price. 1-800-608-9950
Can't find what you need?
Let our bond experts help!
Get Started »
No obligation, takes 2 minutes
If you'd prefer, call us at