Rhode Island Auto Dealer Bond

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 $50,000 motor vehicle dealer bonds for as low as 0.5% of the bond amount ($250). Apply today!

The Rhode Island Code requires auto dealers to post bonds and abide by their terms while operating their businesses. They could face costly bond claims and lose their license if they break the law by committing fraud or another violation.

Surety bonds hold bondholders accountable to the law. If the bondholder (in this case, the auto dealer) breaks the law, they could face bond claims up to $50,000.

Anyone applying to form a new dealership in Rhode Island and sell four or more cars within a year must post a surety bond as part of the licensing process. If you have any questions about your requirements, call the Dealers Commission and Regulations Division at (401) 462-5746.

Here’s an overview of what you’ll need to provide to operate your new dealership legally in Rhode Island. (See the application form for complete instructions, phone numbers, and forms.)

Complete the application form and include the following items:

• Proposed dealership name and location
• Financial statement
• $50,000 surety bond
• Bureau of Criminal Identification 
• Copy of dealership’s formal lease agreement
• Copy of city/town license or letter of zoning approval
• Four pictures of the outside of your building

After your application is approved, provide the following documents within 30 days:

• License and plate numbers
• Sales tax permit and blue forms
• Picture of your sign
• License fee ($302.50)
• Telephone number for your business
• Insurance filing 
• Dealer agreement (if franchise dealer)
• Bill of Sale form

Once you’ve provided all the required information, a Licensing Aide will contact you to finalize your license.