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Florida Motor Vehicle Dealer License Surety Bonds
The State of Florida has 8 Categories for motor vehicle dealer licensing. Florida law states that any individual or entity that sells, offers for sale, displays for sale or otherwise deals in 3 or more motor vehicles in any 12 month period is required to provide a Motor Vehicle Dealers License Surety Bond. Each license requires a surety bond of $25,000.00 or $10,000.00 prior to issuance of a license and at each annual renewal. Florida Motor Vehicle Dealer Bonds play an essential role in the state's automotive industry, serving as a financial safeguard against dealer misconduct and ensuring compliance with regulatory requirements. Mandatory for all auto dealers, including independent and franchise dealers, as well as recreational vehicle dealers, this surety bond protects consumers from potential damages. However, the significance of this bond extends beyond its surface-level purpose, influencing the way dealers operate and interact with customers. To fully understand the implications of this requirement, it's essential to examine the intricacies of Florida Motor Vehicle Dealer Bonds.
What is a Florida Motor Vehicle Dealer Bond?
In the domain of consumer protection, a Florida Motor Vehicle Dealer Bond plays a critical role as a financial safeguard. This $25,000 surety bond is a mandatory requirement for all auto dealers in Florida to obtain a dealer license, ensuring compliance with state regulations. The bond serves as a financial guarantee that protects consumers against losses caused by dealer misconduct or violations of laws.
The Florida Motor Vehicle Dealer Bond must be filed with the Florida Department of Highway Safety and Motor Vehicles (FLHSMV) as part of the licensing process for both Independent and Franchise dealers. In the event of a valid claim, the surety company compensates the affected party, while the dealer must reimburse the surety for any payouts. Compliance with Florida Statutes Chapter 320 is mandatory for maintaining the bond and the associated dealer license. This bonding process fosters trust in the automotive marketplace and establishes a framework for ethical business practices. The Florida Motor Vehicle Dealer Bond promotes accountability and protects consumers from potential harm.
Who Needs an Auto Dealer Bond In Florida?
Florida motor vehicle dealers, encompassing both Independent and Franchise dealers, are subject to a mandatory requirement to secure a $25,000 surety bond as a condition of obtaining a dealer license. This requirement is mandated under Florida Statutes Chapter 320 and applies uniformly across all dealers. The bond requirement serves as a necessary component of the licensing process, with the primary aim of providing financial protection to consumers who may be impacted by a dealer's actions.
In addition to standard motor vehicle dealers, recreational vehicle dealers also need to secure surety bonds, albeit with varying requirements based on their license types. Specifically, those handling four or fewer vehicles must secure a $10,000 bond, while those with five or more vehicles are required to obtain a $20,000 bond. Irrespective of dealership type, compliance with state regulations and obtaining a surety bond is an absolute necessity for operating a licensed dealership in Florida. Dealers who fail to meet this requirement may be denied licensure and face potential penalties. Obtaining the necessary bond is a key step in the licensing process, underscoring the dealer's commitment to adhering to relevant state laws and regulations.
Why is This Surety Bond Required?
Motor vehicle dealerships are entrusted with significant financial transactions and sensitive consumer information, making the potential for misconduct or unethical practices a pressing concern. The Florida Motor Vehicle Dealer Bond serves as a financial guarantee, ensuring that dealers comply with state regulations and protect consumers from potential harm.
The bond is required by Florida statutes, specifically Chapter 320, which outlines the legal requirements for motor vehicle dealers operating within the state. The following key points highlight the importance of this surety bond:
Provides restitution for damages incurred by consumers due to the dealer's actions
Demonstrates a dealer's commitment to ethical business practices and consumer protection
Mandatory for obtaining or renewing a motor vehicle dealer license, ensuring dealers operate legally in Florida
How Much Does a Florida Motor Vehicle Dealer Bond Cost?
A Florida Motor Vehicle Dealer Bond typically has an annual term, with specific expiration dates depending on the type of dealer. For Independent dealers, the bond expires on April 30th, while Franchise dealers have a December 31st expiration date. The bond's duration is one year from the date of issuance, after which it must be renewed to maintain compliance with state regulations. As with any surety bond, the rate is based upon the applicant, accounts with good credit can expect a lower rate than accounts that are currently experiencing credit issues. A1 Surety Bonds offers rates as low as $188 per year for qualifying accounts! (FLIADA Members can get an additional 10% discount) Accounts with bad or damaged credit can still get the bond they need with financing terms to help make the higher rate affordable.
Apply for your Florida Motor Vehicle Dealer License Surety Bond today! Let our expert staff get the bond you need at the lowest possible price!
| License Category | Bond Amount Required | License Description |
| Franchised Dealer (VF) | $25,000.00 | Allows the licensed individual or business entity to sell new motor vehicles for a specific manufacturer whith whom they have a written agreement. Apply for your FL Franchised Dealer (VF) License Bond. |
*These bonds are written for a 1 year term with a mandatory renewal date of Dec 31st and must be renewed or replaced with a new bond.
| License Category | Bond Amount Required | License Description |
| Recreational Vehicle Dealer (RV) | $10,000.00 | Allows the licensed individual or business entity to sell new and/or used recreational vehicles. In order to be considered a "New" dealer, the licensee must have a licensed contract with the manufacturer authorizing them to act as a dealer of their brand/line of recreational vehicles. Apply for your FL Recreational Vehicle Dealer (RV) License Bond. |
| Used Recreational Vehicle Dealer (RU) | $10,000.00 | Allows the licensed individual or business entity to sell only used recreational vehicles. Apply for your FL Used Recreational Vehicle Dealer (RU) License Bond. |
*These bonds are written for a 1 year term with a mandatory renewal date of September 30th and must be renewed or replaced with a new bond.
| License Category | Bond Amount Required | License Description |
| Independent Dealer (VI) | $25,000.00 | Allows the licensed individual or business entity to sell used vehicles only as a retailer or wholesaler. Apply for your FL Independent Dealer (VI) License Bond. |
| Service Facility (SF) | $25,000.00 | Required of dealerships that perform only service and does not sell or lease any vehicles. Apply for your FL Service Facility (SF) License Bond. |
| Wholesale Dealer (VW) | $25,000.00 | Allows the licensed individual or business entity to buy/seal/deal with other licensed dealers at wholesale only. Apply for your FL Recreational Vehicle Dealer (RV) License Bond. |
| Auctions (VA) | $25,000.00 | Allows the licensed individual or business entity to sell via auction/bid process on the behalf of other dealers. This license category cannot sell retail. Apply for your FL Auctions (VA) License Bond. |
| Salvage (SD) | $25,000.00 | Allows the licensed individual or business entity to buy and/or sell salvaged or wrecked automobiles. Anyone engaging in the business of acquiring salvaged/wrecked vehicles for the purpose of reselling or parting them out, must have a Salvage License. If they are rebuilding salvaged/wrecked vehicles for sale, they will need to reassign the titles to an independent dealer as the Salvage license does not cover resale of rebuilt salvaged/wrecked vehicles. Apply for your FL Salvage (SD) License Bond. |
*These bonds are written for a 1 year term with a mandatory renewal date of April 30th and must be renewed or replaced with a new bond.
How long does it last?
The duration of a Florida Motor Vehicle Dealer Bond's validity period is an important consideration for dealerships. This period affects the frequency of premium payments, the duration of liability protection, and overall bonding costs.
In Florida, motor vehicle dealer bonds have specific expiration dates, which are:
Independent dealers: April 30th
Franchise dealers: December 31st
Expiration dates are fixed, but premium payments may be prorated, depending on the bond purchase date.
Some important factors to note regarding the duration of a Florida Motor Vehicle Dealer Bond:
Premium payments are due annually, prior to the bond's expiration date
Regular updates on financial status and credit can help reduce surety bond costs over time
The surety company provides coverage for the entire bond period, unless a claim is made and the dealer must reimburse the surety for any payouts
These factors underscore the importance of understanding the bond's validity period and its implications for dealerships. By staying informed, dealers can effectively manage their bonding requirements and guarantee compliance with relevant regulations.
How do I Get My Florida Motor Vehicle Dealer Bond?
To obtain a Florida Motor Vehicle Dealer Bond, dealers must complete the initial application process and receive their bond via email. Following receipt of the bond, the dealer must then file the original bond with the local Motor Vehicle Field Operation Office to complete the licensing process. After the bond has been successfully filed, it is essential to understand the subsequent steps and responsibilities associated with maintaining the bond.
What do I do now that I have my bond?
Securing a Florida Motor Vehicle Dealer Bond marks a significant step towards completing the licensing process. Once obtained, the original bond must be filed with the local Motor Vehicle Field Operation Office. To guarantee a seamless submission, dealers should have all required documentation ready, including proof of garage liability insurance and the completed application form HSMV 86056.
To maintain compliance, consider the following key points:
Keep track of the bond's expiration date, as renewal is necessary annually for Independent Dealers by April 30th and for Franchise Dealers by December 31st.
Maintain accurate records and adhere to state regulations to avoid claims against the bond, which may result in financial liability.
Utilize renewal notifications sent by the surety company to guarantee timely renewal and continued compliance with the Florida Department of Highway Safety and Motor Vehicles.