Motor Vehicle Dealer Bond Claims Guide Dealerships in all states are required to have an auto dealer bond to be licensed. This article covers how to avoid bond claims and the claims process. <!-- wp:image {"align":"right","height":400,"sizeSlug":"large"} -->
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<p>Dealerships in all states are required to have a surety bond as part of their licensing. State regulators require the bond as a financial safeguard for consumers should the dealer cause damages through misleading or fraudulent behavior. Consumers and other financially interested parties can make a claim upon the surety bond should the dealership fail to make proper recompense for their actions.</p>
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<p>Dealers are required to utilize a third-party surety company, such as Jet Insurance Company, to purchase their license bond. This changes the nature of this state-required “insurance” coverage. Jet has to make a promise (the surety bond) to pay damaged parties that are not our clients. Jet services our dealership customers from start to end, and Jet has a duty to protect the public (as a credit line) in addition to defending our clients from baseless claims.</p>
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<h2>Auto Dealer Violations</h2>
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<p>A bond claim is the least of a dealership's concerns when it comes to the disciplinary actions that can be taken against them by the State Department of Motor Vehicles, Department of Transportation, or any other regulatory agency requiring the bond. Fines, license suspensions or revocation, and civil penalties are all available tools for the State’s enforcing agency. While there are many infractions a dealer can commit, below is a list of actions that could lead to a bond claim. Please note, this list is not exhaustive and these vary slightly from state to state.</p>
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<h3><em>Prohibited Motor Vehicle Dealer Acts:</em></h3>
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<p>1) Failure to transfer clean title<br>2) Misrepresenting vehicle to the consumer<br>3) Failure to refund purchases or deposits when appropriately requested<br>4) Misuse of temporary tags<br>5) Failure to pay title, registration, taxes, or other fees<br>6) Requiring the customer to finance or insure with a specific company<br>7) Dealing stolen vehicles<br>8) Selling a trade-in prior to the transaction of purchase<br>9) Odometer tampering</p>
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<p>Misrepresentation (#2 on our list) comes in many forms and can cause concrete financial damage to the consumer. Practices such as falsifying title, bait and switch, falsifying registration, falsifying vehicle permits, claiming a car is new when it isn't, not disclosing a vehicle is salvage, and the list goes on of these deceptive practices.</p>
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<h3><em>Who Can Make a Bond Claim Against a Motor Vehicle Dealer?</em></h3>
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<p>A motor vehicle dealer can! But this is only as a used dealership being the consumer dealing with wholesalers and brokers who have caused financial harm from fraudulent behavior. </p>
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<p>Most often a bond claim starts with a complaint from the dealership’s customer. The legislation requiring the bond in each state is meant to protect public consumers, so the bond creates protection for them up to the bond’s penal sum.</p>
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<p>In many states, floor plan financing companies and other vehicle stakeholders (co-owners) can also make a claim against the dealership.</p>
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<p>Some states will file a bond claim for damaged parties. The State may even preemptively pay claimants and later make a claim against the surety bond, moving funds through dedicated accounts along the way.</p>
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<h3><em>When Can a Bond Claim Be Made to Jet?</em></h3>
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<p>A claim can be made from the bond’s effective date to the end of the bond liability tail. The liability/bond tail, also known as the limit of statutes, is the period of time when a claim can be made by a damaged consumer for a transaction completed during the bond’s active period.</p>
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<p>The bond’s active period runs from the effective date to the end of the cancellation or grace period. The cancellation period is a window upon which the State keeps the bond active after Jet Insurance Company files a cancellation notice. </p>
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<p>This benefits the consumers by extending the window where they can make a claim and the bonded dealership by giving extra time to keep the bond active and avoid licensing issues. The cancellation period is typically 30 days, but some states have a 45- or 60-day cancellation period.</p>
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<h3><em>How Much Bond Coverage Is Provided?</em></h3>
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<p>Each state defines what the bond limit is (sometimes called bond amount or penal sum) which varies from $5,000 to $100,000 depending on how much financial protection the State believes is needed for a dealership.</p>
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<p>Some states will require different bond limits based on the dealership type, whether used, franchise, wholesale, etc.</p>
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<p>This bond limit caps how much can be paid by the surety company during the bond’s term. In no case for an Auto Dealer Bond will a surety company pay more than the bond limit. If multiple claimants exist, the bond limit still can’t be exceeded and is divided up evenly. Though how “evenly” depends on how each state stipulates who gets paid and at what percentage.</p>
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<h2>Vehicle Dealer Bond Claim Process</h2>
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<p>All bond claims start from an action taken by an auto dealer that leads to a complaint from their customer. The dealer can either (a) correct the mistake (assuming one was made), (b) deny any wrongdoing, or (c) ignore the complaint. Should the consumer remain unsatisfied, they will need to escalate the matter to the authorities—this is where the process will vary greatly depending on the state.</p>
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<p>Let’s run through a couple of examples of how different States proceed with a complaint against a motor vehicle dealer:</p>
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<p><em><span style="text-decoration: underline;">Ohio</span>: You deal with it, dealer</em>.<br><a rel="noreferrer noopener" href="https://codes.ohio.gov/ohio-administrative-code/chapter-4501:1-3" target="_blank">Ohio statutes</a> put the onus on the dealership and the consumer to make a concerted effort to squash any issue. The consumer must place their complaint with the dealership and the dealership has 60 days to respond or can request more time. Only after that time period can the consumer take the issue to the Attorney General to investigate and make a ruling.</p>
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<p><em><span style="text-decoration: underline;">Alabama</span>: Let the courts decide. </em><br>The complainant (customer) must make a case in the local court against the dealership to try to receive any restitution. Should a final judgment be made in favor of the consumer, the consumer must then exhaust all available remedies to collect. This all happens before the Alabama Department of Transportation Board will review the case and determine whether there was a violation of the Alabama Code.</p>
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<p><em><span style="text-decoration: underline;">North Carolina</span>: Consumer: "I was wronged". Department of Transportation: "Hold my beer." </em><br>A written complaint must be filed by the consumer directly to the North Carolina DMV who will handle the entire process. The dealership is given a chance to make its case against the complaint. Ultimately the DMV will make a ruling and issue an order to make restitution (if applicable).</p>
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<h2>Recovery and Indemnification</h2>
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<p>Regardless of how a complaint and settlement determination is made, when Jet receives a notice of a bond claim it is our responsibility to investigate its validity. Even after a court and/or regulator has made a judgment, Jet still does the due diligence in defense of the car dealer.</p>
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<p>When it is clear the dealership has made an infraction and caused the loss, Jet will make payment to the damaged party. The State’s regulatory agency will be notified that payment has been made by Jet to the consumer. </p>
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<p>Let’s make a clear point at this juncture. When a bond claim payout has been made, the dealership has yet to atone for their misdeed. The State may have imposed additional penalties and suspensions on the dealer, but Jet has made payment for the financial damage. The nature of the surety bond is more like a line of credit, not insurance—the dealer is not off the hook and still responsible to pay Jet back (this is the same for all surety companies).</p>
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<p>The indemnification of the surety company is part of all surety bonds. As the dealership begins to repay the license bond claim, they are taking the necessary steps to refill their status as a reputable dealership. Jet will work with our dealerships to make this process possible and get the dealer back in the driver’s seat.</p>
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<p>Each state has different laws surrounding motor vehicle dealers, so it’s best to read up on these regulations surrounding your business.</p>
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<figure class="wp-block-table is-style-stripes t-max-900"><table><thead><tr><th>Bond Information</th><th>Legislation/Regulations</th></tr></thead><tbody><tr><td><a href="https://jetsurety.com/alabama/auto-dealer-bond">Alabama</a></td><td><a href="http://alisondb.legislature.state.al.us/alison/codeofalabama/1975/coatoc.htm" target="_blank" rel="noreferrer noopener">Code Of Alabama - Title 40 Chapter 12 Licenses</a></td></tr><tr><td><a href="https://jetsurety.com/alaska/auto-dealer-bond">Alaska</a></td><td><a rel="noreferrer noopener" href="https://touchngo.com/lglcntr/akstats/Statutes/Title08/Chapter66.htm" target="_blank">Alaska Statutes - Title 8, Chapter 66</a></td></tr><tr><td><a href="https://jetsurety.com/arizona/auto-dealer-bond">Arizona</a></td><td><a href="https://www.azleg.gov/arsDetail/?title=28" target="_blank" rel="noreferrer noopener">Arizona Revised Statutes - Title 28 Transportation</a></td></tr><tr><td><a href="https://jetsurety.com/arkansas/auto-dealer-bond">Arkansas</a></td><td>New Vehicle Dealers: <a rel="noreferrer noopener" href="https://www.amvc.arkansas.gov/lawsandrules.html" target="_blank">Arkansas Motor Vehicle Commission Rules</a><br>Used Vehicle Dealers: <a rel="noreferrer noopener" href="https://www.dps.arkansas.gov/law-enforcement/arkansas-state-police/services-programs/used-motor-vehicle-dealer-license/" target="_blank">Arkansas State Police Used Dealer Laws</a></td></tr><tr><td><a href="https://jetsurety.com/california/auto-dealer-bonds">California</a></td><td><a href="https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?division=5.&chapter=4.&lawCode=VEH&article=1.">California Legislative Information - Division 5 Vehicle Code</a></td></tr><tr><td><a href="https://jetsurety.com/connecticut/auto-dealer-bond">Connecticut</a></td><td><a rel="noreferrer noopener" href="https://portal.ct.gov/dmv/commercial-and-industry-services/get-regulated-business-license?language=en_US" target="_blank">Connecticut General Statutes, Chapter 246</a></td></tr><tr><td><a href="https://jetsurety.com/delaware/auto-dealer-bond">Delaware</a></td><td><a rel="noreferrer noopener" href="https://delcode.delaware.gov/title30/c030/index.html" target="_blank">Title 30, Chapter 30 of the Delaware Code</a><br><a rel="noreferrer noopener" href="https://delcode.delaware.gov/title21/c063/index.html" target="_blank">Delaware Title 21, Chapter 63</a></td></tr><tr><td><a href="https://jetsurety.com/district-of-columbia/auto-dealer-bond">District of Columbia</a></td><td><a href="https://dlcp.dc.gov/node/1618866" target="_blank" rel="noreferrer noopener">District of Columbia Department of Licensing and Consumer Protection Laws</a></td></tr><tr><td><a href="https://jetsurety.com/florida/auto-dealer-bond">Florida</a></td><td><a href="http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0300-0399/0320/0320.html" target="_blank" rel="noreferrer noopener">Florida Statutes - Chapter 320 Motor Vehicle Licenses</a></td></tr><tr><td><a href="https://jetsurety.com/georgia/auto-dealer-bond">Georgia</a></td><td><a href="https://casetext.com/statute/code-of-georgia/title-43-professions-and-businesses/chapter-47-used-motor-vehicle-and-used-motor-vehicle-parts-dealers" target="_blank" rel="noreferrer noopener">Georgia Code - Title 47, Chapter 47</a></td></tr><tr><td><a href="https://jetsurety.com/hawaii/auto-dealer-bond">Hawaii</a></td><td><a href="https://www.capitol.hawaii.gov/hrscurrent/vol10_ch0436-0474/HRS0437/HRS_0437-.htm" target="_blank" rel="noreferrer noopener">Hawaii Revised Statutes, Chapter 437</a></td></tr><tr><td><a href="https://jetsurety.com/idaho/auto-dealer-bond">Idaho</a></td><td><a href="https://portal.ct.gov/dmv/commercial-and-industry-services/get-regulated-business-license?language=en_US" target="_blank" rel="noreferrer noopener">Connecticut General Statutes, Chapter 246</a></td></tr><tr><td><a href="https://jetsurety.com/illinois/auto-dealer-bond">Illinois</a></td><td><a href="https://www.ilsos.gov/departments/vehicles/dealer_remitter.html" target="_blank" rel="noreferrer noopener">Illinois Secretary of State Regulations</a></td></tr><tr><td><a href="https://jetsurety.com/indiana/auto-dealer-bond">Indiana</a></td><td><a href="https://www.in.gov/sos/dealer/requirements/dealer-bond-requirements/" target="_blank" rel="noreferrer noopener">Indiana Secretary of State Regulations</a></td></tr><tr><td><a href="https://jetsurety.com/iowa/auto-dealer-bond">Iowa</a></td><td><a rel="noreferrer noopener" href="https://www.legis.iowa.gov/docs/ico/chapter/321.pdf" target="_blank">Iowa Code, Chapter 321 - MOTOR VEHICLES AND LAW OF THE ROAD</a><br><a rel="noreferrer noopener" href="https://www.legis.iowa.gov/docs/ico/chapter/322.pdf" target="_blank">Iowa Code, Chapter 322 - VEHICLE MANUFACTURERS, DISTRIBUTORS, WHOLESALERS, & DEALERS</a><br><a rel="noreferrer noopener" href="https://www.legis.iowa.gov/docs/ico/chapter/322C.pdf" target="_blank">Iowa Code, Chapter 322C - RECREATIONAL VEHICLE DEALERS, MANUFACTURERS, & DISTRIBUTORS</a></td></tr><tr><td><a href="https://jetsurety.com/kansas/auto-dealer-bond">Kansas</a></td><td><a rel="noreferrer noopener" href="https://www.ksrevisor.org/statutes/ksa_ch8.html" target="_blank">Kansas Statutes - Chapter 8, Article 24</a></td></tr><tr><td><a href="https://jetsurety.com/kansas/auto-dealer-bond">Kentucky</a></td><td><a rel="noreferrer noopener" href="https://apps.legislature.ky.gov/law/statutes/chapter.aspx?id=38045" target="_blank">Kentucky Revised Statutes - Chapter 190</a></td></tr><tr><td><a href="https://jetsurety.com/louisiana/auto-dealer-bonds">Louisiana</a></td><td><a href="http://legis.la.gov/legis/Law.aspx?p=y&d=408758">Louisiana Revised Statutes - Title 32</a></td></tr><tr><td><a href="https://jetsurety.com/maine/auto-dealer-bond">Maine</a></td><td><a href="https://legislature.maine.gov/statutes/29-A/title29-Ach9sec0.html" target="_blank" rel="noreferrer noopener">Maine Legislature, Title 29-A, Chapter 9</a></td></tr><tr><td><a href="https://jetsurety.com/maryland/auto-dealer-bond">Maryland</a></td><td><a rel="noreferrer noopener" href="http://mdrules.elaws.us/comar/11_12" target="_blank">Code of Maryland Regulations - Title 11, Subtitle 12</a></td></tr><tr><td><a href="https://jetsurety.com/massachusetts/auto-dealer-bond">Massachusetts</a></td><td><a rel="noreferrer noopener" href="https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXX/Chapter140/Section58" target="_blank">Massachusetts General Laws - Title XX, Chapter 140, Section 58</a></td></tr><tr><td><a href="https://jetsurety.com/michigan/auto-dealer-bond">Michigan</a></td><td><a rel="noreferrer noopener" href="http://www.legislature.mi.gov/(S(f23dbosz5qni2y2nw4zazk0d))/mileg.aspx?page=getObject&objectName=mcl-300-1949-II-DEALERS-AND-WRECKERS-MUST-BE-LICENSED" target="_blank">Michigan Vehicle Code - Act 300 of 1949</a></td></tr><tr><td><a href="https://jetsurety.com/minnesota/auto-dealer-bond">Minnesota</a></td><td><a href="https://www.revisor.mn.gov/statutes/cite/168.27" target="_blank" rel="noreferrer noopener">Minnesota Statutes, Section 168.27</a></td></tr><tr><td><a href="https://jetsurety.com/mississippi/auto-dealer-bond">Mississippi</a></td><td>New Vehicle Dealers: <a rel="noreferrer noopener" href="https://www.mmvc.ms.gov/regulations" target="_blank">Mississippi Motor Vehicle Commission Regulations</a><br>Used Vehicle Dealers: <a rel="noreferrer noopener" href="https://www.dor.ms.gov/tagstitles/apply-motor-vehicle-dealer-license" target="_blank">Mississippi Department of Revenue Regulations</a></td></tr><tr><td><a href="https://jetsurety.com/missouri/auto-dealer-bond">Missouri</a></td><td><a href="https://revisor.mo.gov/main/OneChapter.aspx?chapter=301" target="_blank" rel="noreferrer noopener">Revisor of Missouri - Chapter 301</a></td></tr><tr><td><a href="https://jetsurety.com/montana/auto-dealer-bond">Montana</a></td><td><a rel="noreferrer noopener" href="https://leg.mt.gov/bills/mca/title_0610/chapter_0040/part_0010/sections_index.html" target="_blank">Montana Code Annotated - Title 61, Chapter 4</a></td></tr><tr><td><a href="https://jetsurety.com/nebraska/auto-dealer-bond">Nebraska</a></td><td><a rel="noreferrer noopener" href="https://nebraskalegislature.gov/laws/statutes.php?statute=60-1401" target="_blank">Nebraska Revised Statute - 60-1401</a></td></tr><tr><td><a href="https://jetsurety.com/nevada/auto-dealer-bond">Nevada</a></td><td><a href="https://www.leg.state.nv.us/NRS/NRS-482.html" target="_blank" rel="noreferrer noopener">Nevada Statutes - Chapter 482</a></td></tr><tr><td><a href="https://jetsurety.com/new-hampshire/auto-dealer-bond">New Hampshire</a></td><td><a href="https://www.gencourt.state.nh.us/rsa/html/nhtoc/nhtoc-xxi.htm" target="_blank" rel="noreferrer noopener">New Hampshire Statutes XXI: Motor Vehicles</a></td></tr><tr><td><a href="https://jetsurety.com/new-jersey/auto-dealer-bond">New Jersey</a></td><td><a rel="noreferrer noopener" href="https://www.state.nj.us/mvc/pdf/business/nj_motor_vehicle_dealer_regulations.pdf" target="_blank">New Jersey Code - Title 13, Chapter 21</a></td></tr><tr><td><a href="https://jetsurety.com/new-mexico/auto-dealer-bond">New Mexico</a></td><td><a href="https://www.nmlegis.gov/sessions/99%20Regular/FinalVersions/SB0122.html" target="_blank" rel="noreferrer noopener">New Mexico Statutes - Title 66</a></td></tr><tr><td><a href="https://jetsurety.com/new-york/auto-dealer-bond">New York</a></td><td><a href="http://public.leginfo.state.ny.us/lawssrch.cgi?NVLWO:" target="_blank" rel="noreferrer noopener">NYS Consolidated Laws, Vehicle and Traffic, Article 16</a></td></tr><tr><td><a href="https://jetsurety.com/north-carolina/auto-dealer-bond">North Carolina</a></td><td><a href="https://www.ncleg.net/EnactedLegislation/Statutes/HTML/ByArticle/Chapter_20/Article_12.html" target="_blank" rel="noreferrer noopener">North Carolina Statutes - Article 12 Motor Vehicle Dealers and Manufacturers Licensing Law</a></td></tr><tr><td><a href="https://jetsurety.com/north-dakota/auto-dealer-bond">North Dakota</a></td><td><a href="https://ndlegis.gov/cencode/t39.html" target="_blank" rel="noreferrer noopener">North Dakota Century Code - Title 39</a></td></tr><tr><td><a href="https://jetsurety.com/ohio/auto-dealer-bond">Ohio</a></td><td><a href="https://codes.ohio.gov/ohio-administrative-code/chapter-4501:1-3" target="_blank" rel="noreferrer noopener">Ohio Administrative Code - Chapter 4501 Motor Vehicle Dealers and Salespersons</a></td></tr><tr><td><a href="https://jetsurety.com/oklahoma/auto-dealer-bond">Oklahoma</a></td><td><a rel="noreferrer noopener" href="https://www.oscn.net/applications/oscn/DeliverDocument.asp?CiteID=82911" target="_blank">Oklahoma Statues - Title 47, Chapter 62A</a></td></tr><tr><td><a href="https://jetsurety.com/oregon/auto-dealer-bond">Oregon</a></td><td><a href="https://oregon.public.law/statutes/ors_chapter_822" target="_blank" rel="noreferrer noopener">Oregon Revised Statutes - Chapter 822 Regulation of Vehicle Related Businesses</a></td></tr><tr><td><a href="https://jetsurety.com/pennsylvania/auto-dealer-bond">Pennsylvania</a></td><td><a rel="noreferrer noopener" href="https://www.legis.state.pa.us/cfdocs/legis/LI/consCheck.cfm?txtType=HTM&ttl=75&div=0&chpt=13&sctn=35&subsctn=0" target="_blank">Dealer/Manufacturer - 75 Pa.C.S. 1335</a><br><a rel="noreferrer noopener" href="https://www.legis.state.pa.us/cfdocs/legis/LI/consCheck.cfm?txtType=HTM&ttl=75&div=0&chpt=75&sctn=3&subsctn=1" target="_blank">Full/Issuing Agent, Card Agent, Messenger Service - 75 Pa.C.S. 7503.1</a><br><a rel="noreferrer noopener" href="https://www.legis.state.pa.us/cfdocs/legis/LI/consCheck.cfm?txtType=HTM&ttl=75&div=0&chpt=73&sctn=2&subsctn=0" target="_blank">Salvor - 75 Pa.C.S. 7302</a></td></tr><tr><td><a href="https://jetsurety.com/rhode-island/auto-dealer-bond">Rhode Island</a></td><td><a href="http://webserver.rilin.state.ri.us/Statutes/TITLE31/31-5/INDEX.HTM" target="_blank" rel="noreferrer noopener">Rhode Island General Law Chapter 5</a></td></tr><tr><td><a href="https://jetsurety.com/south-carolina/auto-dealer-bond">South Carolina</a></td><td><a rel="noreferrer noopener" href="https://www.scstatehouse.gov/code/title56.php" target="_blank">South Carolina Code - Title 56</a></td></tr><tr><td><a href="https://jetsurety.com/south-dakota/auto-dealer-bond">South Dakota</a></td><td><a rel="noreferrer noopener" href="https://sdlegislature.gov/Statutes/Codified_Laws/2053397" target="_blank">South Dakota Code - Title 32</a></td></tr><tr><td><a href="https://jetsurety.com/tennessee/auto-dealer-bond">Tennessee</a></td><td><a rel="noreferrer noopener" href="https://advance.lexis.com/container?config=014CJAA5ZGVhZjA3NS02MmMzLTRlZWQtOGJjNC00YzQ1MmZlNzc2YWYKAFBvZENhdGFsb2e9zYpNUjTRaIWVfyrur9ud&crid=67260ef7-d212-42f1-b5fc-76de49025897&prid=625cef9c-1bcb-40fe-b751-934f503750b7" target="_blank">Tennessee Code - Title 55, Chapter 17</a></td></tr><tr><td><a href="https://jetsurety.com/texas/auto-dealer-bond">Texas</a></td><td><a href="https://statutes.capitol.texas.gov/Docs/TN/htm/TN.503.htm#503.029" target="_blank" rel="noreferrer noopener">Texas Transportation Code - Title 7 Vehicles and Traffic</a></td></tr><tr><td><a href="https://jetsurety.com/utah/auto-dealer-bond">Utah</a></td><td><a rel="noreferrer noopener" href="https://le.utah.gov/xcode/Title41/Chapter3/41-3.html" target="_blank">Utah Code - Chapter 3, Title 41</a></td></tr><tr><td><a href="https://jetsurety.com/vermont/auto-dealer-bond">Vermont</a></td><td><a href="https://legislature.vermont.gov/statutes/title/23" target="_blank" rel="noreferrer noopener">Vermont Statutes, Title 23</a></td></tr><tr><td><a href="https://jetsurety.com/virginia/auto-dealer-bond">Virginia</a></td><td><a rel="noreferrer noopener" href="https://law.lis.virginia.gov/vacode/title46.2/chapter15/" target="_blank">Code of Virginia - Chapter 15, Title 46.2</a></td></tr><tr><td><a href="https://jetsurety.com/washington/auto-dealer-bond">Washington</a></td><td><a rel="noreferrer noopener" href="https://app.leg.wa.gov/rcw/default.aspx?cite=46.70" target="_blank">Washington State Legislature - Title 46, Chapter 46.70</a></td></tr><tr><td><a href="https://jetsurety.com/west-virginia/auto-dealer-bond">West Virginia</a></td><td><a rel="noreferrer noopener" href="https://code.wvlegislature.gov/17A-6/#:~:text=DRUG%20REPOSITORY%20PROGRAM.-,CHAPTER%2017A.,OF%20TITLE%2C%20AND%20ANTITHEFT%20PROVISIONS.&text=ARTICLE%206.,PLATES%3B%20TEMPORARY%20PLATES%20OR%20MARKERS." target="_blank">Motor Vehicle Dealers, Distributors, Wholesalers - West Virginia Code, Article 6A, Chapter 17A</a><br><a rel="noreferrer noopener" href="https://code.wvlegislature.gov/17A-6C/" target="_blank">Automobile Auctions - West Virginia Code, Article 6C, Chapter 17A</a></td></tr><tr><td><a href="https://jetsurety.com/wyoming/auto-dealer-bond">Wyoming</a></td><td><a rel="noreferrer noopener" href="https://www.dot.state.wy.us/files/live/sites/wydot/files/shared/Motor%20Vehicle%20Services/Wyoming%20Statute%20Vehicle%20Dealers%202020.pdf" target="_blank">Wyoming Statutes - Title 31, Chapter 16</a></td></tr></tbody></table></figure>
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Motor Vehicle Dealer Bond Claims Guide
Dealerships in all states are required to have an auto dealer bond to be licensed. This article covers how to avoid bond claims and the claims process.
Texas Motor Vehicle Dealer Bond Limit Increases Texas motor vehicle dealers face a surety bond limit increase from $25,000 to $50,000 due to abuse of temporary tags. <!-- wp:paragraph -->
<p>For over 30 years, Independent Texas Motor Vehicle Dealers holding a General Distinguishing Number (GDN) have been required to maintain a $25,000 Auto Dealer Bond. <a rel="noreferrer noopener" href="https://legiscan.com/TX/text/HB3533/id/2403185" target="_blank">House Bill 3533</a>, passed on June 4, 2021, amends <a rel="noreferrer noopener" href="https://statutes.capitol.texas.gov/Docs/TN/htm/TN.503.htm" target="_blank">Texas Transportation Code Chapter 503</a> to include a bond limit increase, doubling the bond amount from $25,000 to $50,000. </p>
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<p><strong>How Are Independent Dealers Affected?</strong></p>
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<p>Effective September 1, 2021, those applying for a new independent dealer license or renewing their current license, on or after this date, will need to secure a $50,000 Motor Vehicle Dealer’s Surety Bond. The bond is issued or renewed for a two-year period. </p>
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<p>The Texas Department of Motor Vehicles is mandated to update its website to include information on how consumers can file a claim on the dealer’s surety bond. At the time this article was posted no claim information was live at <a href="https://www.txdmv.gov/" target="_blank" rel="noreferrer noopener">https://www.txdmv.gov/</a>. Similarly, auto dealers are responsible for posting a visible notice alongside their license which provides information on the claims process.</p>
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<p>Franchise dealers are not impacted by the passing of this bill.</p>
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<p><strong>Why Is the Limit Being Increased?</strong></p>
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<p>The Texas Department of Motor Vehicles held a <a href="https://www.txdmv.gov/sites/default/files/board-meeting/transcript/2021-02/02-04-21_Transcript_OGC_TxDMV%20Board.pdf" target="_blank" rel="noreferrer noopener">board meeting</a> discussing the issue of temporary tag abuse by independent dealers. Current regulations do not prevent misuse of the tag system, therefore the board feels that changes must be made to provide financial recourse. Dealers are still granted a specific number of temporary tags and may request more if necessary. </p>
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<p>The bond limit increase helps consumers negatively affected by temporary tag misuse and the financial issues associated if a dealer goes out of business.</p>
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<p>Check out Jet’s <a href="https://jetsurety.com/texas/auto-dealer-bond">Texas Motor Vehicle Dealer Bond</a> page for more information.</p>
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Texas Motor Vehicle Dealer Bond Limit Increases
Texas motor vehicle dealers face a surety bond limit increase from $25,000 to $50,000 due to abuse of temporary tags.