Illinois Auto Dealer Bond

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What is an Illinois auto dealer bond?

In Illinois, you must post a surety bond within the first 36 months of running a new dealership to maintain your state business license. The official name for this $50,000 bond is the Illinois Motor Vehicle Dealer Designated Agent Bond. It expires on January 31 each year and must be renewed. You’ll need a separate bond for each new vehicle dealership location.

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.

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What does an Illinois 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. 

ZipBonds can offer $50,000 Illinois motor vehicle dealer bonds for as low as $375 annually.

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Why are these bonds required in Illinois?

The Illinois Statutes requires new vehicle dealers to post a $50,000 bond for each business location. These bonds ensure that dealers pay all title and registration fees and taxes.

Surety bonds hold bondholders accountable to the law. If the bondholder (in this case, the auto dealer) breaks the law, they could face bond claims up to $50,000.

Who needs an Illinois auto dealer bond?

If you’re a vehicle dealer, as defined below, you must post a surety bond and maintain it for the first 60 consecutive months of business operations. 

A vehicle dealer in Illinois is “any person engaged in the business of selling or dealing in…five or more vehicles during the year, or who acts as an intermediary, agent or broker for any licensed dealer or vehicle purchaser, or who represents or advertises that he/she is engaged in or intends to engage in such a business.” Read more.

How to Get Your Illinois Auto Dealer License

Follow this general process to apply for your motor vehicle dealer license online:

  • New motor vehicle dealer
  • Used motor vehicle dealer
  • Attend an 8-hour training with the Illinois Secretary of State’s office.
  • Pay a $1,000 license fee.
  • Pay for license plates (once licensed): $45 per master set and $13 for duplicate plates.
  • Set up an inspection with the Secretary of State to ensure you meet state requirements.
  • Obtain a surety bond (see form). 
  • Renew your license and bond by December 31 each year.

You can request an application packet by contacting the Illinois Secretary of State by calling (217) 782-7817 or visiting the following address:

  • Illinois Secretary of State
  • Dealer/Remitter Licensing Section
  • 501 S. Second St. Rm. 069
  • Springfield, IL 62756-7000

Frequently Asked Questions

Unlike most states, your surety provider must physically ship your Illinois auto dealer bond. With ZipBonds, we strive to prepare your bond within 24 hours of application so you can receive it in the mail as promptly as possible.

The Secretary of State Vehicle Services Department regulates licensing and bonding for the motor vehicle industry in Illinois.

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 Illinois, your motor vehicle dealer license and bond expire on December 31 of each year.

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.

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.

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 Illinois Auto Dealer Bond

ZipBonds offers the fastest and most secure option for getting auto dealer bonds. Our all-digital platform is intuitive and straightforward. Apply online or call us at (888) 435-4191 to speak with an agent directly. Many of our bonds can be processed and issued immediately online.



Founders Ryan Swalve and Zach Mefferd formed the vision for 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.