Auto dealer surety bond requirement
An auto dealer bond, also know as a car dealer bond or an MVD Bond (motor vehicle dealer bond), is a type of surety bond that is required by a particular US state. This car dealer surety bond protects consumers in the event the car dealer fails to provide adequate products and services, namely an automobile. Each US state has a separate set of rules and regulations relating the surety bonds for automobile dealers.
For example, in the State of Georgia, only used car and used car parts dealers are required to acquire a surety bond in order to maintain their dealer license. Besides being registered and licensed, the Georgia State Board of Registration of Used Motor Vehicle Dealers and Used Motor Vehicle Parts Dealers require these dealers to secure and maintain a $35,000 surety bond.
For the purposes of the auto dealer surety bond requirement, the Board identifies used motor vehicle dealers as, "motor vehicle brokers, independent motor vehicle leasing agencies which sell or offer to sell used motor vehicles, used motor vehicle auction companies and pawnbrokers who sell motor vehicles to the public. Used parts license include used parts dealers, rebuilders, and salvage dealers." It is important to note that Georgia is not in the majority when it comes to their requirements. As a matter of fact, many other states set forth similar requires to new car dealers, not just used car dealers. Some even require motorcycle dealers, recreational vehicle (RV) dealers, and others to have a surety bond in order to obtain or renew their dealer license.