Maryland Auto Dealer Surety Bond
What is a Maryland auto dealer surety bond?
The Maryland Department of Transportation requires motor vehicle dealers in the state to post surety bonds. Requirements could range anywhere from $5,000 to $300,000 and apply to the following types of dealers:
- New vehicle dealers
- Used vehicle dealers
- Wholesale dealers
- Motorcycle dealers
- Trailer dealers
- Manufacturers
- Second state manufacturers
- Distributors
- Title service agents
- Emergency vehicle dealers
- Salespeople
- Scrap processors
- Automotive dismantlers & recyclers
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 Maryland:
How much does a Maryland 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.
How to Apply for Your Auto Dealer License in Maryland
Follow the Motor Vehicle Administration guidance to apply for your auto dealer license in Maryland successfully.
- License to Sell New Vehicles
- License to Sell Used Vehicles
- License for a Wholesale Dealer
- License to Sell Motorcycles
- License to Sell Emergency Vehicles
- License to Sell Trailers
- License for Title Service Agent
- License for Manufacturers and Distributors
- License for Automotive Dismantler and Recycler or Scrap Processor
- Salesman’s License
Most applicants must complete an application, obtain a surety bond, pass a background check, ensure their property is zoned correctly, complete other required forms, pay fees, and pass an inspection.
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 Maryland?
Maryland Code requires auto dealers in the state to post a license and surety bond. The Maryland Department of Transportation Motor Vehicle Administration regulates licensing and bonding for the motor vehicle industry.
How do I renew my surety bond and license?
You must renew your bond each year or every other year by a specific date for it to remain active (and for you to maintain your business license). This expiration date coincides with the date your license expires.
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.
The Maryland Business License and Compliance division will mail you a license renewal packet 60 days before your license expires. Your renewal must be submitted at least 15 days before your license expires.
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 Maryland 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.