Motor vehicle dealer bond cost
New York used motor vehicle dealers will see their bond amounts increase with the passage of new legislation. AB 8166 was passed in September 2016 and will take effect on March 28, 2017. If you are a new or used retail or wholesale motor vehicle dealer, you must post a surety bond.
The bond amount you are required to post is based on the amount of vehicles sold in last calendar year. Used motor vehicle dealers that sold 200 or fewer vehicles during the previous year must post a bond in the amount of $10,000. Used motor vehicle dealers that sold more than 200 vehicles during the previous year must post a $25,000 surety bond.
Dealers who sell new motor vehicles are required to post a bond in the amount of $50,000. All bonds are subject to underwriting. This means that bond premiums are determined by the financial credentials of your credit report. Be sure to have your facility number at hand when speaking with a surety specialist.
Why this bond?
By posting a bond, the principal (dealer) guarantees to conduct business in full compliance with the Vehicle and Traffic Law section 415(6-b). This includes:
- paying all valid bank drafts
- transferring good titles to each sold vehicle
- maintaining all customer deposits
- paying all fines imposed by the Commissioner of Motor Vehicles
- repaying any overcharges of a customer
Vehicle dealer bond details
This specific bond type will remain continuous unless canceled by the surety. If the surety chooses to cancel a bond, a written cancellation notice must be mailed to the Commissioner of Motor Vehicles 60 days prior to the deemed cancellation date.
Become a motor vehicle dealer
Both new and used motor vehicle licensees must complete the original facility application (Form VS-1) and send it to the Department of Motor Vehicles. Each application must be accompanied by the following documents:
- surety bond (Form VS-3)
- application and business fees
- MV-50 fees
- Certificate of Authority (NYS Department of Taxation and Finance DTF-17A)
- business location documents
Apply for your surety bond
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