What is a Nevada Auto Dealer Bond?
One of the requirements for opening an auto dealership in Nevada is posting a surety bond, known as a Nevada auto dealer bond. This type of license bond is required by the state, and it ensures that a licensed auto dealer operates in accordance with state laws and industry standards. If a customer experiences a financial loss after doing business with a licensed auto dealer, a claim can be made against a Nevada auto dealer bond.
A Nevada auto dealer bond is a contract between the principal required to obtain the bond, the Nevada Department of Motor Vehicles as the obligee requiring the bond, and the surety company providing the bond to the dealership. When a valid claim is made, the surety company extends credit to the dealership to cover losses, but the dealer ultimately repays any successful claims.
Are You Required to Get a Nevada Auto Dealer Bond?
Under Nevada state law, any person or entity that exchanges, purchases, displays for sale, or sells motor vehicles in exchange for compensation is defined as an auto dealer. Regulations dictate that any auto dealer must secure a Nevada auto dealer bond in order to comply with state laws. Auto dealer bonds in Nevada are necessary if you or your business falls into one of the following categories:
- Franchised auto dealer
- Used auto dealer
- Distributor of motor vehicles
Nevada Auto Dealer Bond Obligee Details
Like many other states, the obligee of Nevada auto dealer bonds is the Nevada Department of Motor Vehicles. The department is responsible to enforcing licensing and bonding requirements for all auto dealers operating in the state. Licensed auto dealers may contact the obligee of their Nevada auto dealer bond through the following details:
Nevada Department of Motor Vehicles
Occupational and Business Licensing
555 Wright Way
Carson City, Nevada 89711
What Does a Nevada Auto Dealer Bond Cost?
A bond of $100,000 is required for new and used auto dealers in Nevada, but this is not the price you pay for your bond. Instead, a Nevada auto dealer bond is priced as a percentage of the bond, ranging from 1 to 10% of the total. The percentage you pay is known as your bond premium, and it depends on several different factors.
Surety companies take a close look at your personal credit history to determine the price of your bond, alongside details about your business. Auto dealers with a fair to low credit score may be seen as a higher risk than a dealer with a clean credit history and high score. Because of the increased risk, the premium paid for a Nevada auto dealer bond is higher for bad credit dealers.
How Do I Get a Nevada Auto Dealer Bond?
Getting a Nevada auto dealer bond starts with submitting an application. This can be done quickly and easily online. Once your information is reviewed and personal credit score checked, you are given a quote for your bond and instructions on how to complete the process.
Nevada Auto Dealer Bond Term and Renewal
Auto dealer bonds in Nevada has the same expiration date as an auto dealer’s state license. Each Nevada auto dealer license expires one year from the date it was issued. Renewal for an auto dealer license can be submitted online, and the surety company providing your Nevada auto dealer bond sends information and instruction on renewing the bond prior to its expiration date.