What is a New Hampshire Auto Dealer Bond?
In nearly all states throughout the country, motor vehicle dealers are required to have and maintain a license in the state they operate. Typically, having an auto dealer bond is part of the licensing process. In order to comply with current regulations and rules, auto dealers operating in New Hampshire must have a surety bond, known as a New Hampshire auto dealer bond.
A New Hampshire auto dealer bond is a form of protection for the customers that engage in business with a licensed auto dealer. It also provides a safeguard to the state in the event an auto dealer does not meet its obligations under the law. When a customer or the state incurs damages because an auto dealer does not operate the dealership legally, a claim can be made against a New Hampshire auto dealer bond.
Who Needs a New Hampshire Auto Dealer Bond?
The definition of an auto dealer is simple: any individual or business engaged in the purchase, sale, or exchange of motor vehicles. In New Hampshire, auto dealers of new and used vehicles, as well as wholesale dealers and motorcycle dealers are required to have a license. A New Hampshire auto dealer bond is also a requirement for each category of auto dealer.
New Hampshire Auto Dealer Bond Obligee Details
When a New Hampshire auto dealer bond is put in place, it represents a contract between three parties. First is the licensed auto dealer required to have the bond, known as the principal. Next is the surety company that provides the bond to the auto dealer. The third is the state or local licensing authority requiring a bond to be in place, known as the obligee of the bond.
In New Hampshire, the obligee of an auto dealer bond is as follows:
State of New Hampshire
Department of Safety Division of Motor Vehicles
23 Hazen Drive
Concord, New Hampshire 03305
How Much Does a New Hampshire Auto Dealer Bond Cost?
Each auto dealer operating in New Hampshire must have an auto dealer bond in place of now less than $25,000. Fortunately, the price you pay out of pocket for the bond is only a small percentage of the bond total. The percentage paid, known as the bond premium, ranges from 1 to 10% of the bond amount for most auto dealers.
The bond premium is determined when the surety company evaluates the financial stability of the auto dealer or dealership. Personal credit score and financial history are considered because the surety company takes on some risk in providing a bond to an auto dealer. If credit has been an issue in the past, the bond premium will be on the higher end of the range for a New Hampshire auto dealer bond.
How do You Get a New Hampshire Auto Dealer Bond?
Obtaining a New Hampshire auto dealer bond is a quick and straightforward process. A brief application is submitted, usually online, and then the surety company determines the bond premium. Once the cost of the bond is paid, the surety company finalizes the bonding process by providing information to the obligee. It is important to note that New Hampshire auto dealer bonds must be renewed annually in order to remain compliant with the law.