In this article, we’ll walk you through everything you need to get a Wisconsin 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 Wisconsin car dealer license bond needs.
What Are the Different Types of Wisconsin Car Dealer Licenses?
The Wisconsin Department of Transportation issues a dozen types of motor vehicle dealer licenses differentiated by the vehicles sold (cars and trucks, moped, motorcycles, RVs), and who is doing the selling (salvage dealer, wholesale dealer, retail dealer, etc.).
This article focuses on the process of obtaining a retail vehicle dealer license permitting the sale of vehicles to the public.
What Are the Steps in the Licensing Process?
Before you print and complete your license application, you’ll need to accomplish the following:
- Establish a permanent business location that meets DOT requirements and obtain a local zoning permit
- Register your business with the Wisconsin Department of Revenue to get a sales tax seller permit
- Apply for a local business permit
- Enter into an agreement with a local service facility (unless you will have your own service department)
- Pay all required fees to DOT and the Wisconsin Department of Financial Institutions
- Purchase a $50,000 Wisconsin car dealer bond
Once you have completed all of these tasks, you can fill out the application and related forms and mail them, along with required supporting documentation, to the Wisconsin DOT for processing.
Why Is a Wisconsin Car Dealer Bond Required?
In purchasing a Wisconsin car dealer bond, you (the “principal” required to obtain the bond) are pledging to operate in complete compliance with all laws and regulations governing the sale of motor vehicles in the state. If you fail to do so, and someone experiences a financial loss as a result, the injured party can file a claim against your bond and receive compensation for the damages.
That injured party could be the state (the “obligee” requiring the bond) filing a claim for unpaid taxes, or a consumer who was not informed of prior damage to a used vehicle.
How Are Wisconsin Car Dealer Bond Claims Paid?
The third party to a Wisconsin car dealer bond is the “surety,” the company guaranteeing the payment of claims by the principal.
The legally binding surety bond agreement, obligates the principal to pay all valid claims. However, as the guarantor, the surety typically pays a legitimate claim on behalf of the principal and is repaid by the principal for the resulting debt.
How Much Does a Wisconsin Car Dealer Bond Cost?
Multiplying the $50,000 bond amount—by the premium rate assigned by the surety on a case-by-case basis—gives you the annual premium cost for a Wisconsin car dealer bond. The premium rate will reflect the underwriters’ assessment of the risk the surety will take on in paying claims on behalf of the principal.
The best measure of the risk is the principal’s personal credit score. With a high credit score, you might see premiums as low as one to two percent. A low credit score, on the other hand, suggests a higher risk level and results in a higher premium rate.
Our surety bond professionals will get you the Wisconsin car dealer bond you need at a competitive rate.
