Motor vehicle dealer bonds, sometimes referred to as DMV bonds or auto dealer bonds are surety bonds required by the state prior to the selling of any vehicle. They must be filed with the DMV before an auto dealership can obtain a license. These bonds are required in order to protect consumers when buying vehicles, particularly used vehicles, and to prevent fraud on the part of the dealership. The purchase of a surety bond also lends vehicle dealers credibility, as it will increase the confidence of potential buyers.
In addition, the purchase of a Motor Vehicle Dealer Bond in Phoenix provides the state with important records. The change of ownership of the vehicle is officially recorded, and the dealership is noted on the bond along with the new owner and his credit history.
If you require a dealer bond, the one you purchase will depend on what kind of vehicles you plan to sell. RV bonds, motorcycle dealer bonds, used car dealer bonds, and wholesale car dealer bonds all require a different application, but the general process is the same. If the dealer breaks the terms of the bond, the other party can claim compensation. The cost of these bonds will also depend on a variety of factors. The type of bond, the amount required for your specific dealership, your financial credentials and credit score, and whether or not you decide to finance your premium will all affect your purchase price. Typically on the standard market, the premium will be calculated at one percent of the amount of the bond. However, if you have poor credit you should expect to pay a higher percentage for your premium.
The only way to get an accurate estimate of how much you should expect to pay for a motor vehicle dealer bond in Phoenix is to contact a surety company and request a quote. Expect to undergo a credit check and provide proof of finances. Whether your business is selling RVs or motorcycles, these regulations apply to you. New and used vehicle dealerships alike must purchase surety bonds, so why not find out what it will cost you? Contact Southwest Bond Services today for yours.