Indiana Auto Dealer Bond
What is an Indiana auto dealer bond?
The Indiana Secretary of State, Auto Dealer Services Division, requires anyone who sells or deals in 12 or more vehicles per year to be licensed and bonded. Additionally, anyone selling three or more manufactured homes annually must be licensed and bonded.
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. In Indiana, this bond officially goes by the name “Vehicle Merchandising Bond.”
Get Your Auto Dealer Bond in Indiana:
How much does an Indiana auto dealer surety 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 Indiana auto dealer bonds for as low as $250. Apply today!
Who needs an auto dealer bond in Indiana?
You’ll need a license if you fall into either of these two categories:
- Those selling, offering to sell, or advertising for sale at least 12 new vehicles in a 12-month period need a new motor vehicle dealer license.
- Those selling, offering to sell, or advertising for sale at least 12 used vehicles in a 12-month period need a new motor vehicle dealer license.
To apply for the following license types, you will need a $25,000 surety bond:
- Auto auction
- Automotive salvage recycler
- Converter manufacturer
- New or used auto dealer
- Distributor
- Manufacturer
- Transfer dealer
- Transport operator
- Watercraft
The requirement also pertains to trailers, semitrailers, off-road vehicles, mini-trucks, RVs, and snowmobiles.
How to Apply for Your Auto Dealer License in Indiana
Follow this general process to become an auto dealer or form a dealership in Indiana. Complete the online application and submit the following items along with it:
- Background check
- Certificate of Insurance
- License fee
- Business entity documentation
- Indiana vehicle merchandising bond
- Photo ID
- National Mobility Equipment Dealers Association Accreditation (mobility only)
- Photos of location
- Zoning affidavit
- Retail merchant certificate
Check out the Help Guide for more detailed instructions. You’ll find the forms you need on the SoS website.
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 Indiana?
The Secretary of State regulates licensing and bonding for the motor vehicle industry in Indiana.
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 Indiana 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.