New Mexico Auto Dealer Bond
What is a New Mexico auto dealer bond?
The New Mexico Motor Vehicle Division (MVD) requires motor vehicle and motorcycle dealers to post a surety bond. This includes new and used auto dealers, dismantlers, recyclers, wholesalers, wreckers, and title service companies. This bond is officially called a Vehicle Dealer or Auto Recycler Bond.
- Motorcycle dealers: $12,500 bond
- Motor vehicle dealers, recyclers, wholesalers, title service companies distributors, and wreckers: $50,000 bond
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 New Mexico:
How much does a New Mexico 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.
We can issue New Mexico motorcycle dealer bonds instantly for $125. Other auto dealer bonds in New Mexico require underwriting, but many applicants are bonded for as low as 0.5% of the bond amount, or $250 per year. Apply today!
Who needs a vehicle dealer bond in New Mexico?
The New Mexico Statutes outlines the state’s requirements for auto dealers and related professionals. The law requires the following license types to be bonded:
- Auto dealers
- Wholesalers
- Distributors
- Auto recyclers
- Title service companies
- Motorcycle-only dealers
All licensees except motorcycle dealers must post and maintain a $50,000 surety bond. Motorcycle-only dealers need a $12,500 bond.
How to Apply for Your Auto Dealer License in New Mexico
You must be licensed with the Dealer Licensing Bureau if you sell more than four vehicles yearly. Here are the documents you’ll need to complete (scan or attach to your application) to apply successfully:
- Business ownership documents
- Business identification numbers
- Location information (zoning, business license, property lease)
- $50,000 surety bond
- Pre-licensing education certificate
- Pictures of your business site, building, inside office space, signage, etc.
- Franchise agreement (new car dealers only)
- $50 application fee (non-refundable)
See the MVD information sheet for detailed instructions. If you need to provide additional documentation, the MVD will call, email, or mail you.
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 New Mexico?
The New Mexico MVD regulates licensing and bonding for motor vehicle dealers in the state.
How do I renew my surety bond?
You must renew your bond and license each year by a specific date for them to remain active. 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 New Mexico 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.