Who Needs A Florida Motor Vehicle Dealer Bond?
Auto dealerships operating in Florida must obtain the proper licenses and a $25,000 Florida Motor Vehicle Dealer Bond.
The state requires a bond to ensure the dealership is operating within Florida Highway Safety and Motor Vehicles Department regulations.
Florida Motor Vehicle Dealer Bonds may also be referred to by various other names. These names include as:
- Motor Vehicle Dealer (MVD) Bonds
- DMV Bonds
- Vehicle Dealer Bonds
- Car Dealership Bonds
- Car Dealer Bonds
- Used Car Dealer Bonds.
How Much Does A Florida Motor Vehicle Dealer Bond Cost?
A Florida Motor Vehicle Dealer Bond also requires the applicant to go through an underwriting process.
Additionally, the bond is also based on the personal credit of all the owners in the dealership.
You can expect to pay anywhere between $165 to $1,250 a year if you maintain good credit. However, Turbo Surety Group can offer dealerships with lower credit ratings competitive premiums.
The Bond Penalty Amount
The bond is$25,000. This is also the only amount of bond that can be provided by law
The Bond Expiration Date
All auto dealer bonds in Florida expire April 30th of the expiration year of the bond term.
The Bond Term
Either 1 or 2 year options are available.
Keep in mind, that choosing the bond terms that are best for your auto dealership is important. Failure to do so could put your business at risk of losing your license and acquiring additional costs and fees.
The State of Florida requires a 30 day cancellation clause on the bond.
The 30 day cancellation clause means is that your bond renewal is due on April 1st of the expiration year. The notice will inform you that you have not renewed your surety bond. The insurance company will also send the notice to the Florida Department of Highway Safety.
The notice will inform you that have 30 days to renew the bond. If you switch insurance companies, the bond will cancel and you will be issued a new original surety bond.
Why Do I Need A Florida Motor Vehicle Dealer Bond?
Florida dealer bonds are required by the Florida Department of Highway Safety and Motor Vehicles. Florida requires a dealer bond for any of the following dealers:
- Independent motor vehicle dealer (VI)
- Wholesale motor vehicle dealer (VW)
- Motor vehicle auction (VA)
- Salvage motor vehicle dealer (SD)
In order for all these types of dealers to keep their license active, they must maintain an active dealer surety bond. Failure to keep a current bond will result in the loss of your dealer license with the State of Florida.
Who Needs a Florida Auto Dealer’s License?
The FLHSMV issues a number of different types of dealer licenses through its Bureau of Dealer Services. A state license is required in order to sell new or used automobiles and trucks. In addition to recreational vehicles and mobile homes.
A license is also required for distributor and retailers. In addition to auctioneers, wholesalers, or salvage dealers.
You will also need to be licensed as a dealer if you buy, sell or display for sale three or more vehicles or mobile homes within any 12-month period. In addition, the law also applies to recreational vehicles. This is regardless if you operate a dealership as a sole proprietor, partnership, or corporation.
What Does the Licensing Process Involve?
The requirements for obtaining a Florida auto dealer’s license include the submission of several documents. In addition, you need to submit a completed license application. The specific requirements vary somewhat depending on the particular type of license. A dealer selling motor vehicles, recreational vehicles, and/or motor homes will need to submit the following to FLHSMV:
- Completed dealer’s license application
- Proof of garage liability insurance
- Surety bond or irrevocable letter of credit in the amount of $25,000
- Proof of business registration with the Florida Division of Corporation
- Certification of completion of dealer pre-licensing training
- Copy of lease for business premises
- Proof of electronic fingerprinting
Why Does The State of Florida Require A Surety Bond Required?
A surety bond serves as a dealer’s guarantee they will do business in compliance within Florida law. The bond also ensures that the dealer operate in a lawful and ethical manner.
The bond provides a source of funds for compensating consumers who fall victim to a dealer’s unlawful or unethical business practices. Unlike an irrevocable letter of credit, purchasing a surety bond doesn’t tie up a dealer’s funds.
How Does an Auto Dealer Bond Work?
A Florida auto dealer bond is a legally binding contract involving three parties:
- FLHSMV as the party requiring the bond is known as the “obligee.”
- The dealer, as the party required to purchase the bond, is the “principal.”
- The company issuing the bond is the “surety.”
The terms of the surety bond agreement specify the statutes the principal must abide by. If a violation occurs that causes financial harm to FLHSMV or a consumer, the injured party can file a claim against the bond.
It is usual practice for the surety to pay any claim it finds to be valid. The principal will then reimburse the surety company.
The surety bond certificate the principal submits to FLHSMV represents a line of credit. This line of credit is established for the principal by the surety at the time the bond is purchased. The surety pays a claim against the principal’s bond by drawing down that line of credit. Thus, this creates a debt that the principal is legally obligated to repay to the surety.
What To Do After Purchasing A Florida Dealer Bond
When you receive your bond you will need to sign it. Then, submit it with the attached power of attorney. You also need to attach other required paperwork and file it your nearest DMV office.
Turbo Surety Group Is Here To Help You Get The Bond You Need!
The process for getting a surety bond in Florida can be simple and painless when your business works with Turbo Surety Bonds. Our experts are ready to answer your questions. You can also just call us at 1-833-436-7987 or email us today.