Oregon Car Dealer License Guide

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In this article, we’ll walk you through everything you need to get an Oregon car dealer license.

Surety Bond Professionals is a family owned and operated bonding agency with over 30 years of experience. Our expert agents are ready to assist with all your Oregon car dealer license bond needs.

What Are the Different Types of Oregon Car Dealer Licenses?

Oregon’s DMV Business Licensing Unit issues several types of dealer licenses, the most common of which is the standard dealer certificate, which permits the sale of both new and used motor vehicles. There are other licenses for sellers of motorcycles, ATVs, snowmobiles and so on, but this article focuses on obtaining a standard dealer certificate, which is good for three years before it needs to be renewed.

What Are the Steps in the Licensing Process?

Before completing and submitting your application for a standard dealer, you will need to accomplish these tasks:

  • Form a legal business entity and register it properly with the IRS and the state of Oregon.
  • Complete eight hours of pre-licensing education offered by an approved provider.
  • Secure a permanent business location and obtain city or county zoning approval.
  • Purchase liability insurance (and Workers’ Compensation insurance if you will have employees).
  • Purchase a $50,000 Oregon car dealer bond.

Complete the application in its entirety and submit it, along with all required supporting evidence and documents, and payment of the $1,187 license fee (for one dealer plate) to the DMV Business Licensing

Why is an Oregon Car Dealer Bond Required?

The state of Oregon requires dealers to purchase a $50,000 surety bond as part of the licensing process. In purchasing an Oregon car dealer bond you are pledging to do business in full compliance with all applicable Oregon statutes. Any failure to do so that results in a financial loss to the state (the “obligee requiring the bond) or to a consumer can result in a claim for damages being filed against your bond by the injured party. The terms of the surety bond agreement legally obligate you, as the bond’s “principal,” to pay all valid claims.

How Are Oregon Car Dealer Bond Claims Paid?

The third party to the legally binding surety bond agreement is the “surety,” the company guaranteeing the payment of claims. Because of that guarantee, the surety usually will pay any valid claim up front, on behalf of the principal, but that doesn’t let you off the hook. It simply means that you are obligated to repay the surety rather than making payment directly to the claimant. If you don’t, the surety can take legal action against you to collect on that debt.

How Much Does an Oregon Car Dealer Bond Cost?

As is the case with most surety bonds, the annual premium for an Oregon car dealer bond is a small percentage of the required bond amount—$50,000 in this case. That percentage is the premium rate, which is set by the surety for each bond.

The biggest underwriting concern is whether you will repay what you owe the surety for any claims paid on your behalf. The best measure of the risk that you won’t is your personal credit score.

The higher your credit score, the lower the risk of non-repayment, which means that your premium rate should be low. But if you have credit issues, the risk to the surety is higher and your premium rate will be as well. Those with the best credit could be assigned a premium rate as low as 1%, while the high end for those with lesser credit could be as much as 3-5%. That makes the premium for an Oregon car dealer bond starting at $500 per annum.

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