Several states have enacted new legislation affecting Motor Vehicle Dealer (MVD) Bond Requirements.
Alabama HB 393, which becomes effective October 1, 2020, makes several changes to the regulations governing the issuance of a motor vehicle dealer license. One of these changes increases the license bond amount for new motor vehicle dealers, used motor vehicle dealers, motor vehicle re-builders, or motor vehicles wholesalers to be for not less than $50,000 or another amount that the Department of Revenue requires. The prior law required a bond in the amount of $25,000.
Illinois HB 3269 requires all used auto dealers who finance the sale of vehicles in-house (“Buy Here-Pay Here”) to be licensed with the state and to post a surety bond or certificate of deposit as of January 1, 2020. A Buy Here-Pay Here dealer sells or leases vehicles and finances them in-house without the use of a third-party lender.
The bond or certificate of deposit must be in the amount of $50,000 for each location which sells or leases used vehicles, transmits titles or transmits registration fees or taxes. If a business has three locations which meet these criteria, the business much obtain three separate $50,000 bonds or certificates of deposit, one for each of the three locations.
If you need assistance placing a MVD bond, or any type of license bond, Goldleaf Surety is here to assist you.