What is a Georgia Auto Dealer Bond?
In the state of Georgia, auto dealers are required to obtain a license to do business legally. Part of the licensing process for dealerships and parts dealers is securing a Georgia auto dealer bond. This surety bond requirement is put in place to safeguard customers from fraudulent business practices and illegal activities when working with a licensed auto dealer.
A Georgia auto dealer bond involves three distinct parties: the surety company which provides the bond, the principal required to purchase the bond, and the obligee which is the authority requiring the bond. When a claim is made against a Georgia auto dealer bond, the surety pays the claim amount to the customer to cover any financial damages they incurred. The dealership is responsible for paying back that amount to the surety.
What Does a Georgia Auto Dealer Bond Cost?
Licensed dealerships in Georgia must have a bond of at least $35,000 in order to comply with state regulations. Fortunately, auto dealers do not have to pay the full amount of the bond to get covered. The surety charges a small percentage of the total bond, typically ranging from 1 to 10%.
The price you pay for a Georgia auto dealer bond depends on your personal credit score and business finances. If you have a healthy track record of on-time payments and responsible money management, you’re likely to pay a lower rate for your Georgia auto dealer bond. Bad credit makes you a higher risk to the surety, so your bond rate is higher to offset some of this risk.
How Do You Get a Georgia Auto Dealer Bond?
You can get a Georgia auto dealer bond when you begin the application process for your auto dealer license. Start by completing a short quote request online to see the price you may pay for your Georgia auto dealer bond. This will be followed by a brief application and payment of the bond premium once you are approved.