Attention all used motor vehicle dealers in New York!
Since March 28, 2017, the surety bond amount has increased as mandated by the New York Assembly Bill 8166.
Before the passing of the bill above, the surety bond amount required for used motor vehicle dealers in New York who are selling less than 200 used cars per the calendar year is $10,000, and for those who are selling more than 200 used cars per the calendar year, the bond amount is $25,000.
With the current bill in place, the surety bond amount has been increased, and the accompanying number of used cars sold is decreased.
- $20,000 – the bond amount for used motor vehicle dealers who sells 50 cars or less per the calendar year
- $100,000 – the bond amount for used motor vehicle dealers who sells more than 50 cars per the calendar year
What is a used motor vehicle dealer?
A used motor vehicle dealer is someone who sells, buys, or deals with the following used motor vehicles:
- Passenger automobile
- Sports utility vehicle
- Light truck
- Pick-up truck
- Minivan or suburban
All used motor vehicles should have a gross vehicle weight rating of 10,000 pounds or less to be considered.
Vehicles that have been converted into a tow truck or those that are classified as a garbage truck, bus, school bus, marine trailer, recreational vehicle, motorcycle, snowmobile, mobile home, construction equipment, and trailer are not part of this category.
Surety Bond’s Purpose
The surety bond is one of the licensure requirements for persons who are applying for a used car motor vehicle dealer license in the State of New York.
It is required by the New York Department of Motor Vehicle as a way to guarantee that the licensed used car motor vehicle dealer will comply with the provisions of Section 415 of the New York Vehicle and Traffic Law such as the following:
- Maintain all the money that the customers have given the licensed used motor vehicle dealer as a deposit up to the time that the certificate of title has been transferred to the buyer
- Accurately transfer the certificate of title to the buyer
- Pay all bank drafts drawn by the surety bond’s Principal or the licensed used motor vehicle dealer for the purchase of vehicles
- Repay the buyer for any overcharges incurred during the registration and titling of the vehicle bought
- Pay all the fines imposed by the New York Commissioner of Motor Vehicles by the Vehicle and Traffic Law
The Obligee of the surety bond or the State of New York will have the right to recover a fair amount on the surety bond to compensate the Principal’s client in case the licensed used motor vehicle dealer fails to perform his or her contractual obligations lawfully.
Do you need further information about this surety bond update or any other surety bonds? Talk to one of our surety bond experts today at 800-333-7800! We’ll be happy to answer your questions!