On Sept. 29, 2016 Governor Andrew Cuomo signed into law a piece of legislation that will increase the surety bond amounts required for used-vehicle dealers to become licensed. Surety bonds help ensure that the Motor Vehicle Dealers follow legislation and regulations in your state. Generally, obtaining and filing a surety bond is a normal part of the dealer licensing process in every state. Depending on your state the underwriting process can vary based on the Bond amount. In many cases a credit report is required for bond approval. In situations where the credit is less than favorable, we represent Surety Companies that charge a little more to issue the bond.
Currently applicants and used motor vehicle dealers in New York, who sell fewer than 200 cars in the preceding calendar year only need a $10,000 bond. Those who sell more than 200 vehicles, they need a $25,000 bond to become licensed.
The new New York State law will take effect on March 28, 2017. Motor Vehicle Dealers who sell fewer than 50 cars in the preceding calendar year, are required to purchase a $20,000 surety bond. Dealers who sell more than 50 cars will be required to purchase a $100,000 bond. Additionally, New Motor Vehicle Dealers license applicants will require to post a $20,000 surety bond.
Dealers bonded under current law will be required to comply with the new Motor Vehicle Dealers surety bond requirements when their bond is renewed, replaced, altered or extended. For more surety bond knowledge visit us at bfbond.com/blog, download our application here or call us at 800.921.1008