New York Motor Vehicle Dealer Bond
What is a New York Motor Vehicle Dealer Bond?
A dealer, qualified dealer, or a new motor vehicle dealer who is obtaining a registration certificate from the New York State Commissioner of Motor Vehicles must submit this surety bond.
This bond must be submitted before the motor vehicle dealer can engage in the business of buying, selling, or dealing in motor vehicles, motorcycles, or trailers at retail or wholesale.
Conformity of the motor vehicle dealer to Section 415 of the New York Vehicle and Traffic Law is one of the reasons why this bond is required. Any person who will be affected by the violation of the motor vehicle dealer from the bonded obligations may file a claim against this bond.
Dealers who exclusively sell motor vehicles solely for conversion to be used like the following are exempted from filing this bond:
- Construction equipment
- Garbage trucks
- Marine trailers
- Mobile homes
- Recreational vehicles
- School buses
- Tow trucks
How much does a New York Motor Vehicle Dealer Bond cost?
The bond premium varies per motor vehicle dealer. This will depend on the motor vehicle dealer’s credit score and the bond amount.
Bond premium ranges from 1% to 8% of the bond amount.
$20,000 – first-time registration certificate applicants or motor vehicle dealers who sold 50 motor vehicles or fewer in the previous calendar year
$50,000 – new motor vehicle dealer applicant and every qualified dealer applicant
$100,000 – motor vehicle dealers who sold more than 50 motor vehicles or fewer in the previous calendar year
Do you want to know your bond premium right now? Get your FREE SURETY BOND QUOTE RIGHT HERE!
How can I get a New York Motor Vehicle Dealer Bond?
The next step would be the prequalification or underwriting process. An underwriter will then evaluate the following:
- Your financial strength
- Your job/business performance history
- Your credit score
Once the prequalification process is done, you will be asked to sign an indemnity agreement. Once signed, we will execute the bond and send it to you!
How does a New York Motor Vehicle Dealer Bond work?
This bond has three parties:
Principal – motor vehicle dealer
Obligee – State of New York
Surety – surety bond company
The Principal is the party who is required to perform all the pre-determined conditions stated in the bond. The Obligee is the party who can file a bond claim. The role of the surety is to assure the New York State Commissioner of Motor Vehicles that the principal is capable of fulfilling the obligations covered by the registration certificate.
When a claim is made against the bond, the surety will evaluate the claim first.
The surety is required to ensure that the obligee will be paid if the claim is valid. After the payment has been settled by the surety, the principal will be asked to reimburse the said payment.