Delaware Motor Vehicle Dealer Bond
What is a Delaware motor vehicle dealer bond?
The Delaware Division of Motor Vehicles (DMV) requires auto dealers to post a $25,000 motor vehicle dealer bond to become licensed to work legally.
An auto dealer bond holds dealers and dealerships accountable to the law and industry regulations. If a dealer causes a customer financial harm by breaking the law, the customer can file a claim against the bond for compensation.
Get Your Auto Dealer Bond in Delaware:
How much does a Delaware motor vehicle dealer bond cost?
Auto dealer bond premiums can vary based on applicants’ credit scores: the higher your credit score, the lower your annual premium. If you have excellent credit, expect to pay as little as 1% or less of the total bond amount. Other factors that may impact the cost of your bond include your industry experience and business and personal financials.
ZipBonds can offer $25,000 Delaware motor vehicle dealer bonds for as low as $250 per year. Apply today!
Who needs an auto dealer surety bond and license in Delaware?
Anyone who wants to work as a new or used auto dealer in the state and sell five or more vehicles per year will likely need this bond.
Source: The Delaware Code, Title 21
How to Apply for Your License in Delaware
According to the Delaware Code, auto dealer applicants must fulfill the following requirements to obtain a business license:
- Complete an application.
- Prove you have a Delaware driver’s license and have lived in the state for at least 90 days. (New and franchised vehicle dealers are exempt.)
- Be at least 18 years old.
- Submit fingerprint information for background checks.
- Fulfill all location requirements, including proper zoning, liability insurance, proof of occupancy, signage, and more.
Additional requirements apply to new, used, wholesale, and mobile home dealerships as well as dealerships with leasing or renting businesses. For detailed information, see the Dealer Procedures Manual.
Frequently Asked Questions
How long does it take to get a motor vehicle dealer bond?
Since this bond requires underwriting, we can’t issue it to you instantly. However, the ZipBonds team always strives to deliver your bond to you within 24 hours of application.
Who regulates auto dealer bonds in Delaware?
The Delaware DMV regulates licensing and bonding for the motor vehicle industry.
How do I renew my surety bond?
You must renew your bond each year by a specific date for it to remain active (and for you to maintain your business license). In Delaware, licenses expire on December 31 each year. Bonds should be renewed in conjunction with licenses.
If you’re buying your bond from Zip, we’ll send a reminder when the expiration date is approaching. That way, you’ll have plenty of time to renew your bond and maintain your business license.
What happens if someone files a claim on my bond?
A customer can file a claim if a dealer commits fraud or unethical or unlawful business activity. If the claim is valid, the surety may cover the customer’s losses up to the total amount of the bond. The dealer will then need to pay back the surety for the damages.
Claims can be costly and damage your reputation and ability to get licensed and bonded again, so it’s best to do everything you can to avoid them.
How can I avoid claims on my auto dealer bond?
Avoid illegal activities and fraudulent business practices to prevent claims on your bond. Pay all taxes you owe. Also, ensure you comply with your licensing regulations. If a customer complains about something, address the issue immediately to avoid complaints from turning into costly claims.
How to Get Your Delaware Motor Vehicle Dealer Bond
ZipBonds offers the fastest and most secure option for getting the surety bonds you need. Our all-digital platform is intuitive and straightforward. Apply online or call us at (888) 435-4191 to get bonded in a flash!
About ZipBonds.com
Founders Ryan Swalve and Zach Mefferd formed the vision for ZipBonds.com when they realized how overly complicated it was to help clients place surety. The frustration of being unable to incorporate the technology they’d used in other insurance-focused projects left them thinking “there has to be a better way.”
Fast forward a couple of years, and that better way is the impetus of everything we do at ZipBonds. We constantly look for innovative ways to improve the bonding process for our clients and agents. Our team comprises individuals who understand all angles of surety – for companies, agencies, and individuals. Incorporating everyone’s point of view to improve the process while simultaneously integrating cutting-edge technology is what sets our business apart.