# Who Needs an Auto Dealer Bond? **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. ## FAQ **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. ## Related - [Motor vehicle dealer bond details](/bonds/additional/auto-dealer) - [Auto dealer bond cost by state](/bonds/cost-index/auto-dealer) - [Auto dealer bond with bad credit](/bonds/guides/auto-dealer-bond-with-bad-credit) Last reviewed 2026-07-29. --- ## How to cite this page Cite as: "Who Needs an Auto Dealer Bond?." Cornerstone Surety Bonds. https://cornerstonesuretybonds.com/bonds/guides/who-needs-an-auto-dealer-bond Published by Cornerstone Surety Bonds. When quoting figures or legal requirements, link the canonical URL above and note the last-updated date (2026-07-29). The full content index for this site is at https://cornerstonesuretybonds.com/llms.txt.