Vermont Auto Dealer License Bond
What is a Vermont auto dealer license bond?
The Vermont Agency of Transportation Department of Motor Vehicles requires new and used motor vehicle dealers in the state to post the following surety bonds. Bond requirements are based on the number of vehicles sold the previous year – or the last two years for dealers with a two-year registration.
- First-year dealers: $35,000 bond
- Fewer than 25 vehicles: $20,000 bond
- 25-100 vehicles: $25,000 bond
- 101-250 vehicles: $30,000 bond
- More than 250 vehicles: $35,000 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 Vermont:
How much does a Vermont 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 Vermont auto dealer bonds for as low as $200 per year. Apply today!
Who needs an auto dealer surety bond and license in Vermont?
According to The Vermont Statutes Title 23: Motor Vehicles, dealers may only operate in the state with an active surety bond, letter of credit, or certificate of deposit. Amounts range from $20,000 to $35,000 based on the number of vehicles sold in prior years.
In Vermont, you’re considered an auto dealer if you “engage in the business of selling or exchanging new or used motor vehicles, snowmobiles, motorboats, or all-terrain vehicles.” This definition does not include finance or auction dealers or transporters.
How to Apply for Your Vermont Auto Dealer License
Complete the New Dealer Checklist to apply for your registration in Vermont. Here are the items you’ll need to complete your application.
- Zoning compliance
- 1200 square foot building
- Lease agreement (if applicable)
- Copy of your deed
- Proof of insurance
- Franchise agreement (if applicable)
- $35,000 surety bond (2-year or continual)
- Dealer registration application
For more information and forms, see the Dealer Services page of the Vermont DMV website.
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 Vermont?
The Vermont Agency of Transportation Department of Motor Vehicles regulates licensing and bonding for the motor vehicle industry in the state.
How do I renew my surety bond?
A Vermont auto dealer bond is good for two years and then needs to be renewed (along with the registration).
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 Vermont 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.