Pennsylvania Auto Dealer Bond

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What is a Pennsylvania auto dealer bond?

The Pennsylvania Department of Transportation requires auto dealers (and other parties selling or purchasing motor vehicles for profit) to be licensed and bonded. Here are the different types of motor vehicle dealer bonds in Pennsylvania:

  • Class A: New vehicle dealers
  • Class B: Used vehicle dealers
  • Manufacturer/dealer: $20,000 bond or each place of business
  • Card agent: $3,000 bond
  • Salvor service: $10,000 bond for each place of business
  • Full agent: $30,000 bond for each place of business
  • Messenger service: $50,000 bond for each place of 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:

How much does a Pennsylvania 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 the following premiums on Pennsylvania motor vehicle dealer bonds:

  • $180 for full agent franchise dealers
  • $100 for card agents – single location
  • $100 for salvor service – single location
  • As low as $120 for dealers and manufacturers
  • As low as $500 for messengers

Note: Bond premiums for motor vehicle messengers, manufacturers, and dealers vary and require underwriting.

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Why are these bonds required in PA?

The Pennsylvania Statutes require auto manufacturers and dealers to post bonds and abide by their terms while operating their businesses. If they break the law by committing any violations outlined in the bond contract, they could face claims up to their bond amount. Read more on form MV-375.

Who needs an auto dealer bond in PA?

You must post a surety bond to apply for the following motor vehicle licenses.

  • Motor vehicle dealers and manufacturers: Those who sell or purchase motor vehicles for a profit
  • Salvor: Individuals who tow or process abandoned vehicles 
  • Messenger service: Anyone who offers registrations, titles, or other motor vehicle documents for a fee
  • Card agent: Individuals who provide temporary vehicle registration cards 
  • Full agent: Those who complete transactions for motor vehicle customers

How to Get Your Pennsylvania Auto Dealer License

Follow this general process to apply for your motor vehicle dealer license online:

  • Carefully follow all instructions listed on Form MV-349 (the application).
  • Fulfill the Agent Services Handbook requirements if you want to issue Temporary Registration Plates.
  • Obtain a surety bond for each place of business.
  • Get your vehicle dealership lot license from the Department of State.
  • Undergo a criminal background check. 
  • Read Chapter 13 of the Pennsylvania Vehicle Code, Chapter 75.
  • Familiarize yourself with Title 67, Chapter 53.

See the DOT’s official “Requirements on Becoming a Dealer” packet for details.

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.

You must renew your bond each year by a specific date for it to remain active (and for you to maintain your business license). Your expiration date will be listed on your bond form.

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.

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 Pennsylvania 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.

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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.