Surety Bonds

We specialize in Texas auto dealer surety bonds.

Why do I need a bond?

Texas Department of Motor Vehicles requires automobile dealers to obtain a surety bond. By obtaining the surety bond, the principal owner (the dealer) pledges to comply with all the rules and regulations set by the Texas Transportation Code. This pledge included conducting ethical business in the State of Texas. This surety bond protects any person who suffers financial loss up to the full sum of the bond.

Who is required to get a bond?

Independent Motor Vehicle – May buy, sell, or exchange any type of used cars, trucks, motor homes, and neighborhood vehicles. These dealers may use dealer’s temporary tags, buyer’s temporary tags, and metal dealer license plates on motor vehicles only.  Must provide a surety bond

Independent Motorcycle – May buy, sell, or exchange any type of used motorcycles, motor scooters or ATVs. These dealers may use dealer’s temporary tags, buyer’s temporary tags, and metal dealer license plates on motorcycles, motor scooters or ATVs only.  Must provide a surety bond

Wholesale Dealers – sell or exchange vehicles only with other licensed dealers. These types of dealers are NOT required to have a five-vehicle display area. These dealers may NOT sell vehicles to retail purchasers. Wholesale vehicle dealers may buy, sell, or exchange used vehicles, including motor vehicles, motorcycles, and travel trailers. May buy, sell, or exchange new or used trailers and/or semitrailers. These dealers may use temporary tags and metal dealer license plates.  Must provide a surety bond

Wholesale Motor Vehicle Auction – May offer vehicles for sale by bid only to licensed dealers at a bona fide auction at a permanent location.  Must provide a surety bond

What is required to get a surety bond?

The principal’s credit score is the primary factor in the underwriting process but several other factors such can also be factored. The pricing is tied to the principal’s personal credit report but if you do have a bad credit history, No Problem, we have nearly 100% approval rate for our dealers!

Our Coverage Solutions program narrows the gap between principal owners and bonding carriers. Our relationships with bonding carriers handle any situation. We pride ourselves as guaranteeing the lowest price and quickest turnaround time in the industry.

What’s the different between a bond and insurance?

A common misconception is that the bond is a type of insurance policy.

It’s actually nothing like an insurance policy. It is a contractual guarantee that states a dealer is financially able to settle a “loss” up to the penal sum of the bond. A “loss” occurs when the dealer breaks the terms of the bond. This is normally when a dealer commits fraud or acts in otherwise unethical manner.

Ready to get your surety bond?

 

 

 

Additional Resources

Texas Department of Motor Vehicles Forms

Texas Department of Motor Vehicles Dealer License Application Process