Washington Auto Dealer Bond
What is a Washington auto dealer bond?
The Revised Code of Washington 46.70 requires new and used auto dealers to be licensed and bonded. If you have more than one license classification, you only need to file one bond (for the highest license classification). This requirement applies to the following types of dealers:
- Motor vehicle dealers (new and used): $30,000 bond
- Manufactured home and travel trailer dealers: $30,000 bond
- Travel trailer manufacturers: $20,000 bond
- Miscellaneous vehicle dealers (for off-road vehicles, motorcycles, and neighborhood electric vehicles as well utility, tent, boat, and horse trailers): $5,000 bond
- Boat dealers (vessel dealers): $5,000 bond
- Wreckers: $0-$1,000 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:
How much does a Washington 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 $30,000 Washington motor vehicle dealer bonds for as low as $200.
Why are these bonds required in Washington State?
The Washington State Legislature requires auto dealers to post bonds and abide by their terms while operating their businesses. The bond ensures dealers conduct business according to state laws. If they violate the law, they could face costly bond claims.
For example, if one of your customers suffers financial loss due to you violating the law, they can file a claim on your bond to recover their losses. Likewise, a vehicle dealer suffering damages from a wholesale dealer or manufacturer breaking the law can also file a claim.
How to Get Your Washington Motor Vehicle Business License
You’ll find complete instructions and forms on the Washington DOL website. This Dealer Checklist may also be helpful.
You can submit your application online with the Department of Revenue. You can also mail your application to the following address if you prefer:
- State of Washington
- Business Licensing Service
- PO Box 9034
- Olympia, WA 98507-9034
Follow this general process to apply for your motor vehicle dealer license:
- Your business must be located in a permanent enclosed commercial building.
- Complete a Business License Application and Vehicle Dealer/Manufacturer Addendum.
- Gather the correct documents, including a bond, a Financial/Source of Funds Statement, a Personal Criminal History Statement, and a copy of your property tax statement or rental/lease agreement.
- If you’re only selling used vehicles, you’ll need a Certificate of Dealer Education.
- Pay any necessary fees.
- Pass an inspection.
Keep in mind that you must post a license at every business location before you can begin operations. Instructions for other dealer license types are on the Washington State DOL 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 Washington?
The Washington State Department of Licensing regulates licensing and bonding for the motor vehicle industry in Washington State.
How do I renew my auto dealer bond?
You must renew your bond each year by a specific date for it to remain active (and for you to maintain your business license). 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.
You can renew your license online annually.
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 Washington State 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.
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.