Auto Dealer Bond: Minnesota

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What is a Minnesota auto dealer bond?

To get your auto dealer state license in Minnesota, the Department of Public Safety Motor Vehicles Division requires you to purchase a $50,000 auto dealer bond. This requirement applies to businesses that sell, lease, or arrange the selling of motor vehicles.

A Minnesota 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:

What does a Minnesota 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, you might 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 Minnesota auto dealer bonds for as low as $250 per year. Apply today!

Who needs auto dealer bonds in Minnesota?

The Minnesota Driver and Vehicle Services Division requires the following parties to obtain a $50,000 bond:

  • Those engaged in leasing, selling, or arranging sales of motor vehicles
  • Those who have leased or sold more than five vehicles – retail or wholesale – in one year
  • Those who sell used vehicle parts or process and sell scrap metals from vehicles
  • Those who conduct consignment sales or arrange leases or sales

To deal in boat trailers, horse trailers, snowmobile trailers, or motorized bicycles, you must post a $5,000 bond. This requirement also applies to dealers in trailers with a manufacturer’s rated carrying capacity under 15,000 pounds.

Why is this bond required?

Minnesota Statutes require anyone licensed to engage in the activities listed in the previous section to maintain a surety bond. The bond ensures dealerships faithfully perform their obligations, according to state laws, while engaging in motor vehicle transactions. It also guarantees payment of taxes, license fees, and penalties.

How to Get Your Minnesota Auto Dealer License

First, decide which license type you need to apply for:

  • New motor vehicle dealer
  • Used motor vehicle dealer
  • Motor vehicle lessor
  • Limited use dealer
  • Salvage pool
  • Motor vehicle broker
  • Motor vehicle wholesaler
  • Motor vehicle auctioneer
  • Used vehicle parts
  • Scrap metal processor
  • Motorized bicycle, boat, and snowmobile trailer dealer

Next, you’ll need to complete the following forms to include in your application:

  • Commercial Location Checklist
  • Zoning Verification
  • Certification of Compliance with Minnesota Worker’s Compensation Law
  • Dealer Surety Bond (see form)
  • Demonstration/In-Transit Plate Application
  • Franchise Agreement (if applicable)
  • Verification of Property Lease (or proof of building ownership)

Once you have all your documents, you can submit them along with your Motor Vehicle Dealer License Application to the Minnesota Department of Public Safety (DPS).

You’ll find the forms you need on the DPS website. See the Minnesota Motor Vehicle Dealer Guide for complete instructions.

Frequently Asked Questions

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.

The Minnesota Department of Public Safety Driver and Vehicle Services is the obligee.

Once you’ve purchased your motor vehicle dealer bond, remember to renew it before its expiration date each year. If you’re buying your bond from us, 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 Minnesota 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.