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Florida Motor Vehicle Dealer Bond

What is a Florida Auto Dealer Surety Bond?

  • A Florida Motor Vehicle Dealer Surety Bond is a $25,000 surety bond required for licensure to operate as a motor vehicle dealer in the State of Florida.
  • In Florida, a motor vehicle dealer is defined as any person engaged in the buying, selling, or dealing in motor vehicles; or offering or displaying for either wholesale or retail sale three or more vehicles within any 12 month period; or any person offering motor vehicles for sale to the highest bidder where buyers are licensed motor vehicle dealers; or any person who engages in the business of acquiring salvaged or wrecked motor vehicles for the purpose of reselling them and their parts.
  • We also write:

A Motor Vehicle Dealer Surety Bond Is Not Insurance

By having a $25,000 motor vehicle dealer bond, the auto dealers, or principals, ensure that customers who suffer financial loss or damages due to the dealer’s unlawful business practices will be paid up to the full amount of the bond. However, it is important to keep in mind that motor vehicle bonds are not insurance for the principal. Insurance claims are fairly common and odds are that they will occur at some point, but claims against a surety bond should be avoided at all costs. Auto dealer surety bonds can be claimed if a consumer files a complaint with the State of Florida for damages due to violations of the regulations by the principal and reimbursement is offered. In the event that a bond claim is paid out, the principal will be responsible for reimbursing the surety. On top of that, if a bond claim has to be paid out by the surety it will make the process of becoming bonded again more difficult for the principal. By posting a Florida vehicle dealer bond, the principal agrees to abide by the standards set by the Division of Motorist Services in the Florida statutes and any violations of those standards will complicate the motor vehicle dealer’s ability to conduct business.

Types of Licenses for Florida Auto Dealer Bonds

In Florida, the law states that any motor vehicle dealer must have an appropriate license issued by the state. There are six classes of licenses issued, the four licenses for independent dealers are:

  • Independent Motor Vehicle Dealer (VI): The license allows the licensee to conduct business at retail or wholesale for used motor vehicles only.
  • Wholesale Motor Vehicle Dealer (VW): Allows the licensee to buy from, sell to, and deal only at wholesale.
  • Motor Vehicle Auction (VA): The license permits selling through the bidding process on behalf of licensed dealers but not retail.
  • Salvage Motor Vehicle Dealer (SD): An SD license is required for any person who acquires wrecked or salvaged vehicles for the purpose of reselling them and their parts. If the vehicles are rebuilt before selling, an independent dealer license will be needed before retail sale.

The two licenses for franchise dealers are:

  • Franchised Motor Vehicle Dealer (VF): Allows the licensee to sell new motor vehicles under an agreement with a manufacturer. This license also permits the licensee to sell used motor vehicles.
  • Franchised Motor Vehicle Service Facility (SF): Allows the licensee’s dealership to perform only service as defined in F.S. 320.60(16), and will not or does not sell or lease motor vehicles. Service as defined under Florida Statutes is any maintenance or repair of any motor vehicle or used motor vehicle that is sold or provided to an owner, operator, or user pursuant to a motor vehicle warranty, or any extension thereof, issued by the licensee.

Failure to Obtain a License or Bond

Failure to obtain a license can result in serious repercussions. A person violating the licensing requirements will be charged with a second-degree misdemeanor and can face up to six months in jail and/or a $500 fine. The person found guilty will also be liable under civil law for violation of Florida’s Deceptive and Unfair Trade Practices Act. This can result in fines up to $5,000 per violation and may face a permanent injunction. Bonds are necessary before beginning the application process for licensure and approval can sometimes be a lengthy process. It is important to return the form to your appropriate regional office that serves your locale to avoid any delay in processing time. There is a $75 fee for license renewals and independent dealers must provide proof of at least eight hours of continuing dealer training.

Florida Auto Dealer Bonds

Auto dealer surety bonds protect customers, sellers, and financial enterprises by providing financial guarantees that help keep the industry in order. At The ProSure Group, we have experience providing bonds for hundreds of financial institutions, auto dealers, agricultural product dealers, law firms, insurance agencies and medical care providers. Contact us today to find the right auto dealer bond to suit your needs.

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  • Florida Auto Dealer Surety Bonds are individually underwritten so the cost can vary and is primarily dependent on the credit score of the applicant as well as experience and sometimes other financial considerations. Customers with good credit scores could qualify for a rate lower than 1% of the bond amount. Of course, we can typically handle all credit types — from excellent to poor — as such those terms vary.
  • For example, independent dealers (including licenses VI, VW, VA, and SD) with strong credit scores (generally 680 or higher) that have been In business for at least 2 years could pay as low as $175 for a 1-year term and as low as $306 for a 2-year term for their bond.
  • Franchised Dealers (including licenses VF and SF) with strong credit scores (generally 680 or higher) that have been in business for at least 2 years could pay as low as $150 for a 1-year term and as low as $263 for a 2-year term for their bond.

The surety bond is required in order to be a licensed dealer and is in place to protect the public from noncompliance by the principal with any conditions of a written contract made by the dealer in connection with the sale or exchange of any motor vehicles and against violation of any of the provisions of Chapters 319 and 320 of Florida Statutes in the conduct of the business.

The Florida Department of Highway Safety and Motor Vehicles, Division of Motorist Services administers the application process for Motor Vehicle Dealer Licenses. The bond is one of the most important of several documents which must accompany the license application. The Obligee on the bond reads as the duly appointed and qualified Director of the Division of Motorist Services of the State of Florida.

Bonds run concurrently with the license. Independent Motor Vehicle Dealer (VI), Wholesale Motor Vehicle Dealer (VW), Auction Dealer (VA), and Salvage Dealer (SD) licenses and bonds both expire on April 30th every year. Franchise Motor Vehicle Dealer (VF) licenses and bonds both expire on December 31st every year. The bond can be continued by renewal certificate and can be canceled with 30 days notice from the surety company.

Contact The ProSure Group. As surety bond experts in business over 23 years in Florida, The ProSure Group has handled thousands of bonds of this type and has partnerships with more than 30 different surety companies. This ensures that we get you the best, most competitive pricing and terms available in the marketplace. You just need to complete our simple application and one of our specialists will quickly contact you.

What you will need to submit to obtain your license:

  • Fully Completed Application Form HSMV 86056 including all required documents
  • Initial fee of $300 for each main location
  • Properly executed $25,000 surety bond
  • Business organizational documentation, articles and agreements
  • Copy of dealer training course document, if needed
  • Proof of identification, premises ownership, and organizational certification
  • Proof of adequate insurance coverage in force
  • Electronic fingerprints
  • Approval of business location
  • And more.
If you don't see the bond you're looking for give us a call at (800) 480-3883 and speak to one of our many
Florida Motor Vehicle Dealer Surety Bonds Experts!
Type Bond Obligee Bond Amount
License Florida Motor Vehicle Dealer (MVD) Surety Bond Director of the Division of Motorist Services of the State of Florida
$25,000