Massachusetts Used Auto Dealer Bond
What is a Massachusetts used auto dealer bond?
The Massachusetts Registry of Motor Vehicles requires Class 2 (used) motor vehicle dealers to post a $25,000 Motor Vehicle Dealer Bond as part of the state licensing process. Other names for this bond include Massachusetts Used Car Dealer’s Bond, Used Auto Dealer Bond, or Second Hand Motor Vehicle Dealer Bond.
The state defines a “dealer” as any person who engages principally and substantially in buying, selling, or exchanging motor vehicles, motor vehicle bodies, or trailers while maintaining a building dedicated to their business.
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 Massachusetts:
How much does a Massachusetts 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 $25,000 auto dealer bonds for as low as $125. Apply today!
Who needs an auto dealer surety bond in Massachusetts?
According to the Massachusetts General Laws, anyone:
- Whose principal business is buying or selling secondhand vehicles,
- Who purchases and displays secondhand cars for resale, or
- Who displays secondhand vehicles they don’t own for compensation
…may be granted a used car dealer’s license and must be bonded.
How to Apply for Your Auto Dealer License in Massachusetts
You must obtain the following documents to begin operating as a used auto dealer in your state:
- Current dealer license from the city or town in which you’re doing business
- Current business certificate from your city or town
- Corporation papers from the Secretary of State
- Federal Identification Number/Employer Identification Number from the Department of Treasury
- Used vehicle record book
- Franchise agreement letter (Class 1 dealers)
- List of authorized users with access to the Section 5 plates
- Photos of your exterior business signs, posted business hours, and interior office space
- Floor plan
- Copies of your most recent UVRB
- Copies of the fronts and backs of titles
You can start your application for dealer registration online or mail a copy to the address listed on the physical application. Getting approved for a license and receiving your plates may take up to 4-10 weeks after you submit your application. You’ll find additional dealer information on Mass.gov.
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 Massachusetts?
The Massachusetts Registry of Motor Vehicles (RMV) 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).
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 Massachusetts 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.