South Dakota Auto Dealer License Bond
What is a South Dakota auto dealer license bond?
The South Dakota Department of Revenue requires motor vehicle dealers in the state to post the following surety bonds:
- New or used motor vehicle dealer: $25,000 bond
- Mobile/manufactured home dealer: $25,000 bond
- Final manufacturer dealer: $25,000 bond
- Boat dealer: $20,000 bond
- New and used trailer dealer: $10,000 bond
- Emergency vehicle dealer: $10,000 bond
- Motorcycle dealer: $5,000 bond
- Snowmobile dealer: $5,000 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 South Dakota:
How much does a South Dakota 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.
Snowmobile, motorcycle, boat, and trailer dealer bonds in South Dakota cost only $100 and can be issued instantly. The other bonds listed above require underwriting. ZipBonds can offer $25,000 South Dakota auto dealer bonds for as low as $125 per year. Apply today!
Who needs an auto dealer surety bond and license in South Dakota?
Dealers who sell more than five vehicles in 12 months must post a surety bond to obtain a business license. This law (outlined in the South Dakota Codified Law) applies to the following types of vehicle dealers:
- Motor vehicle dealers
- Used vehicle dealers
- Motorcycle and off-road vehicle dealers
- Trailer dealers
- Emergency vehicle dealers
A dealer includes anyone who engages in the business of selling vehicles.
How to Apply for Your South Dakota Auto Dealer License
To become licensed with the Motor Vehicle Division of the South Dakota Department of Revenue, follow this process:
- Obtain a letter from your city or county zoning that shows your location is approved.
- Include a copy of your lease agreement (if applicable).
- Get public liability insurance.
- File your surety bond.
- Include a copy of your dealer or franchise agreement with your manufacturer or distributor if selling new vehicles.
- Pay a license fee (ranging from $125 to $300, depending on the license type).
- Submit a license application that includes all items listed above.
You must mail your completed application to:
- Dealer Licensing, Motor Vehicle Division
- 445 E. Capitol Ave
- Pierre, SD 57501
See the Dealer Licensing Requirements List for detailed instructions for your license type.
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 South Dakota?
The South Dakota Department of Revenue, Motor Vehicle Division regulates licensing and bonding for the motor vehicle industry in the state.
How do I renew my surety bond?
A South Dakota dealer license is good for five years and then needs to be renewed. Your bond must also be renewed at this time.
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 South Dakota Auto Dealer License 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.