Hawaii Auto Dealer Bond
What is a Hawaii auto dealer bond?
The state of Hawaii requires the following motor vehicle dealers to post an auto dealer bond when a line of credit can’t be reasonably obtained.
- New vehicle dealers
- Used vehicle dealers
- Motorcycle dealers
- Scooter dealers
The bonding requirement for scooter and motorcycle dealers is $10,000. Bond requirements for other dealers vary based on the number of vehicles sold per month. The amount ranges from $25,000 to $100,000 for used vehicle dealers and $50,000 to $200,000 for new vehicle dealers.
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 Hawaii:
How much does a Hawaii auto 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.
Who needs an auto dealer surety bond and license in Hawaii?
You may need a surety bond if you sell more than three vehicles per year but can’t prove your minimum inventory or flooring line of credit. Here are the specific bond requirements in Hawaii for different types of dealers:
- Used motorcycle and scooter dealers need a $10,000 bond.
- Used vehicle dealers selling fewer than 60 vehicles monthly need a $25,000 bond.
- Used vehicle dealers selling more than 60 vehicles per month need a $100,000 bond.
- New vehicle dealers selling fewer than ten vehicles per month need a $50,000 bond.
- New vehicle dealers selling more than ten vehicles monthly need a $200,000 bond.
How to Apply for Your License in Hawaii
Follow these application instructions to get your motor vehicle dealer license in Hawaii:
- Complete the online or physical application.
- Attach a self-inspection report.
- Take photos of the proposed premises.
- Obtain an inventory of flooring line of credit letter (or surety bond).
- Attach a copy of the executed lease or rental agreement.
- Attach a hard copy of the financial statement.
- Pay the required fees.
If you’re submitting a physical application, you can mail your packet to the following address:
- Motor Vehicle Industry Licensing Board
DCCA, PVL Licensing Branch
P.O. Box 3469
Honolulu, HI 96801
You may have additional requirements based on your license type. See the Motor Vehicle Dealer Applicant Requirement Checklist to ensure you don’t miss anything.
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 Hawaii?
The Motor Vehicle Industry Licensing Board regulates licensing and bonding for the motor vehicle industry in Hawaii and is the obligee.
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).
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 Hawaii Auto 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.