Surety Bond Professionals is a family owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your Florida car dealer bond needs. Learn how to get a Florida car dealer license, and contact us today to request a quote on the bond you need.
What Are the Different Types of Florida Auto Dealer Licenses?
The Florida Department of Highway Safety and Motor Vehicles (DHSMV) Bureau of Dealer Services issues these types of dealer licenses:
- Vehicle Franchised dealer (VF)
- Service facility (SF)—operated by a franchised dealer
- Vehicle Independent dealer (VI)—dealing in used motor vehicles
- Vehicle Wholesale dealer (VW)
- Vehicle Auction dealer (VA)
- Salvage dealer (SD)
- Mobile home dealer (DH)
- Mobile home broker (BH)
- Recreational motor vehicle dealer (RV)
- Recreational used motor vehicle dealer (RU)
This article focuses specifically on the licensing process for used motor vehicle dealers seeking a VI license.
What Are the Steps in the Licensing Process?
Before applying for a VI dealer license, you must complete an approved pre-licensing dealer training course and obtain a permanent business location.
You will also need to gather the documents that must be submitted to the Bureau of Dealer Services along with your completed application:
- A copy of your business registration with the Secretary of State, Division of Corporations
- Business formation documents such as Articles of Incorporation, Partnership Agreement, etc. as applicable
- Sales tax number from the Department of Revenue
- Fingerprints
- Proof of liability insurance
- Florida auto dealer surety bond for $25,000
Upon approval of your application and payment of the necessary fees (currently $300 for a VI license), you will receive your license from the Motor Vehicle Field Operations regional office serving your area.
Why is a Florida Auto Dealer Bond Required?
A Florida auto dealer bond is all about protection:
- It protects the state and consumers by guaranteeing that a licensed auto dealer will operate in compliance with all applicable laws and regulations.
- It also protects the state against legal liability for damages consumers experience as a result of a dealer’s failure to live up to that guarantee.
- It protects the state against financial loss by providing a way to recover unpaid taxes, fees, and/or fines owed by the dealer.
- And it protects consumers by ensuring that funds will be available (up to the required $5,000 bond amount) to compensate the injured party for such damages.
- It provides a way to compensate parties injured by the dealer’s failure to do business in a lawful and ethical manner.
How Are Florida Auto Bond Claims Paid?
A Florida auto dealer bond is a legally binding contract that brings together an “obligee,” a “principal,” and a “surety.” The obligee requiring the bond is DHSMV, the principal purchasing the bond is the auto dealer, and the company guaranteeing the bond is the surety. Under the terms of the surety bond agreement, the principal is legally obligated to pay all valid claims against the bond.
In practice, however, unless the principal immediately pays a claim the surety finds to be valid, the surety will go ahead and pay it on behalf of the principal. This initial payment creates a debt that the principal must subsequently repay to the surety.
How Much Does a Florida Auto Dealer Bond Cost?
Florida auto dealer bonds are sold for an annual premium that is a small percentage of the required bond amount, that percentage being the premium rate. The surety sets the premium rate for each bond based largely on the principal’s personal credit score. The main concern is the risk that the principal might not repay the surety promptly for claims paid on the principal’s behalf.
A principal with a high credit score will most likely pay a premium rate that is between one and two percent of the required bond amount. A lower credit score will result in a higher premium rate because of the greater risk to the surety.
Our surety bond professionals will get you the Florida auto dealer bond you need at a competitive rate.
