What is a Pennsylvania Motor Vehicle Sales Finance Company Bond?
Motor vehicle sales finance companies in Pennsylvania must secure a license to be able to conduct business in the state officially. As part of the license requirements, they must also obtain a surety bond to guarantee lawful obedience to their duties.
The Motor Vehicle Sales Finance Company Bond guarantees that sales finance companies will adhere to all laws, rules, and statutes concerning the proper and lawful financing or purchase of installment motor vehicle sale contracts.
The bond also ensures financial compensation to any persons aggrieved by the misconduct of the sales finance company. Persons who have suffered economic losses may maintain an action upon the bond in any court having jurisdiction over the amount claimed.
Sales finance companies are agents or brokers engaged in the business of financing or soliciting the financing of installment sales contracts between other parties, including but not limited to the:
- the generality of the preceding contracts;
- the business of acquiring contracts;
- investing in or lending money or credit on the security of these contracts;
- or interest whether by discount, purchase, or assignment of such contracts.
What are the bond conditions?
- The Surety must be authorized to transact business in the Commonwealth of Pennsylvania.
- The Principal (sales finance company) has applied to the Secretary of Banking of the Commonwealth of Pennsylvania for a license to engage in business according to the provisions executed under the Motor Vehicle Sales Finance Act of June 28, 1947, as amended, and the Consumer Credit Code.
- If the Principal abides by all applicable rules, provisions, and statutes, then the obligation will be null and void. Otherwise, it will remain in full force and effect.
- The Surety may cancel the bond by filing with the Secretary a 30-day written notice of such cancellation. The bond cancellation will be effective on the 30th day after the filing of the written notice of cancellation.
- The aggregate liability of the Surety will not exceed the penal sum of the bond.
What is the bond amount?
The bond amount is $10,000.
The cost of the bond is a percentage (bond premium) of the bond amount determined by the Surety. The cost varies, depending on the determined bond amount by the Department and your credit score.
How can I obtain a Motor Vehicle Sales Finance Company Bond?
We’ve made it easier for you! Just follow the simple steps below!
STEP 1: Apply for the bond
You need to submit a bond application to us. Get to know your bond costs and requirements by applying for a FREE quote!
STEP 2: Underwriting
We will ask you for a couple of relevant information needed for the bond. This will include your credit score. An underwriter will carefully evaluate your submitted documents. Do not worry; everything will be held in the strictest confidence.
STEP 3: Bond execution
Once the underwriter is done with the underwriting process, we will immediately issue the bond and send it to you!
For accessible and affordable surety bonds, call us now!