Vermont Motor Vehicle Dealer Bonds

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

Who Is Required To Purchase a Vermont Auto Dealer Bond?

Vermont issues licenses for the following vehicle classifications:

• New and used cars or motor trucks
• Snowmobile, motorboats, or all-terrain vehicles
• Trailers, semi-trailers, or trailer coaches
• Motorcycles or motor-driven cycles

Only new and used car and motor truck dealers are required to purchase a surety bond to have a license issued.

Every surety bond has an amount. This is the total amount of compensation available to a customer if they are a victim of dealership fraud. We'll cover this in more detail in the next section.

But Vermont calculates this amount based on the number of vehicles sold during the prior year. This is very different from most states.

If you're a brand new dealer, you must purchase a bond with the maximum amount of $35,000 and you can adjust during future renewal dates.

Here's the full table of bond amounts based on number of vehicles sold.

Why is a Vermont Motor Vehicle Dealer Bond Required?

The Department of Motor Vehicles created the licensing process because they want to find the most qualified businesses that have the best opportunity to succeed and serve the public.

But once a license is issued, the DMV can't personally police and hold every licensed dealer accountable to the laws for operating a dealership in the state. This is why they require the surety bond.

The surety bond is the only tool they have to keep dealerships accountable to the decisions they make day to day running their business.

It happens every year, a small number of dealerships will purposefully and financially harm their customers so they can make more money.

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 these or similar actions, the customer or the Department of Taxes in the case of failing to pay sales tax, can make a claim against the bond for the financial damages they suffered.

However, the maximum amount of financial compensation available is capped by the bond amount the dealership is required to have. For example, if your bond is $25,000, any single claim or the sum total of multiple claims is capped at $25,000.

Just to recap:

• You must purchase a surety bond to have a new or used vehicle dealer license issued
• And the bond is used to hold you accountable to not committing fraud against your customers or the Department of Taxes

Now, let's talk about how much purchasing this auto dealer bond is going to cost you.

How Much Does a Vermont Auto Dealer Bond Cost?

A surety bond is a type of insurance contract and the price is going to be custom based on three primary factors:

• 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 they are comfortable with. This rate multiplied by the bond amount you're required to purchase is the price you'll pay.

This price will be a one time payment for your bond term which in Vermont is either every 12 months or 24 months based on the registration option you choose.

Because the price is custom based on the factors above and individual surety, you can save hundreds of dollars if you get a lower rate for your bond.

And that's what we will help you do.

How To Save Hundreds Of Dollars Purchasing Your Vermont Vehicle Dealer Bond

We are 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.

We do this by price shopping with our network of sureties. Because every surety conducts their own assessment, this means rates can vary one, two, even three or more percentage points.

We help vehicle dealers across the country every day get bonded and the sureties do not disclose why those chose the rate they chose.

Here's 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 $35,000 for brand new licensed dealers.

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 Vermont Auto Dealer Bond?

Having us price shop for you does not cost you anything. And once you get your price, you don't have to purchase from us. We just want a chance to get you the lowest price and earn your business.

When you get pricing, the quote will be valid for 30 days. And when you're ready to purchase, all you have to do is complete an online checkout form or purchase over the phone.

Once your payment is processed, our bond issuance team will prepare your bond with the:

• Correct bond form required by the Department of Motor Vehicles
• 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.

The Vermont DMV 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 must have an active surety bond on file. This means you must renew your bond either yearly or every two years depending on the license registration you choose.

This is another great reason to work with us, we manage your auto dealer bond for you.

As your renewal date approaches, your bond specialist will reach out 30 to 40 days in advance to remind you of your bond's expiration date. They will have pricing ready for your current bond amount and if you need to lower your bond amount they will be able to help you do that quickly.

Once you pay your renewal premium, your bond will remain active. If you have to lower your bond amount based on the number of vehicles sold, you'll have to issue a bond rider to update the bond amount. You'll need to submit this change to the DMV.

Getting Your Auto Dealer License In Other States

It's very common for successful dealerships to expand outside of Vermont, into neighboring states. Here is the bond information for many of the neighboring states:

• New York auto dealer bond
• New Jersey auto dealer bond
• Massachusetts auto dealer bond
• New Hampshire auto dealer bond

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

Getting your license is very straightforward in Vermont. The official checklist consists of:

1. A minimum of 1,200 square feet for a building and office (not required for snowmobile or boat dealers)
2. Approved zoning for the property and building
3. A lease agreement for at least 12 months if you're leasing your property
4. A copy of the deed if you own the property
5. Proof of insurance to cover the vehicles used for dealer plates
6. Purchase the auto dealer bond
7. A copy of your franchise agreement if you're selling new vehicles
8. Your completed application packet
9. A criminal background check for all owners of the business

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.