Bond guides
Who Needs an Auto Dealer Bond?
Who needs an auto dealer bond: new, used, wholesale, motorcycle, and RV dealers in states that condition the dealer license on a bond. Triggers and exemptions.
Who needs an auto dealer bond?
Any business applying for or renewing a motor vehicle dealer license in a state that conditions the license on a posted bond needs an auto dealer bond, and most states do. That typically includes new and used car dealers, wholesalers, and motorcycle and RV dealers.
Who typically needs this bond
- Used car dealers, the most commonly bonded dealer class in most states
- New (franchise) car dealers, where the state applies the bond requirement to all dealer classes
- Wholesale dealers who sell only to other dealers, in states that bond the wholesale license
- Motorcycle, RV, trailer, and powersports dealers whose license class carries a bond requirement
- Dealers renewing a license, since the bond generally must stay active for the full license period
What triggers the requirement
- Applying for a new dealer license with the state motor vehicle department
- Renewing an existing license; a lapsed bond typically suspends the license
- Adding a license class or location, in states that require a separate or larger bond for each
- Crossing the state's sales threshold that separates a private seller from a dealer, commonly a set number of vehicle sales per year
Common exemptions
- Private individuals selling below their state's dealer-license threshold
- License classes some states exempt from bonding, such as certain new-vehicle franchise classes; the motor vehicle department's checklist is the authority
What the bond typically costs
Bond amounts are set by each state's motor vehicle department, commonly 10,000 to 100,000 dollars. Premium runs about 1 to 3 percent of the bond amount per year for well-qualified dealers, and more for applicants with challenged credit. Dealers with credit trouble can still get bonded through higher-rate programs.
State requirements vary
Every state sets its own bond amount by license class, and a few states do not require a dealer bond at all. Amounts change by statute, so confirm the current figure with your motor vehicle department or on the bond form itself before you buy.
State requirements
Each state sets its own amount and filing rules. See the state-specific requirement pages:
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- District of Columbia
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
- Wyoming
Frequently asked questions
- Do wholesale dealers need an auto dealer bond?
- In many states, yes. States that license wholesale dealers separately often apply a bond requirement to that class too, sometimes at a different amount than retail dealers. Check your state's wholesale license checklist.
- Can I get an auto dealer bond with bad credit?
- Generally yes. Dealers with challenged credit are usually approved through higher-rate programs rather than declined outright. See our auto dealer bond with bad credit guide for how the pricing tiers work.
- What happens if my dealer bond lapses?
- Most states treat an active bond as a condition of the license, so a lapse typically triggers suspension until a new bond or reinstatement rider is filed.
This page describes how the requirement typically works. Whether a specific business or appointment needs the bond is set by the obligee, statute, or court order that applies to you, so confirm against the current requirement before relying on it.
Ready to get bonded?
Tell us the bond you need and your state. Most license and permit bonds quote same day.
Get a bond quoteRelated
More bond guides
Last reviewed 2026-07-29.