What is an Oregon Auto Dealer Bond?
Businesses that buy and sell various types of vehicles in the state of Oregon must hold a valid license as an auto dealer. The licensing process also includes obtaining an Oregon auto dealer bond. This type of surety bond helps protect customers who work with a licensed dealership. If a sale involves illegal business practices or fraudulent activity, a customer can make a claim against an auto dealer to cover financial damages.
In Oregon, licensed auto dealers, known as the principal of the bond, submit their bond information to the Oregon Department of Motor Vehicles, known as the obligee. A surety company provides the Oregon auto dealer bond to qualified businesses and pays claims on behalf of the auto dealer if necessary. However, auto dealers are responsible for repaying legitimate claims back to the surety.
What Does an Oregon Auto Dealer Bond Cost?
Licensed auto dealers selling new or used vehicles must have an Oregon auto dealer bond of at least $40,000. You do not pay the full amount of the bond, though. The surety agency charges a percentage of the bond amount, ranging from 1 to 10% in most cases. The percentage rate you pay depends on a handful of factors, including your personal credit history and business financials.
An Oregon auto dealer bond is a form of credit that is extended to your dealership. If you have had issues with your credit in the past, such as bankruptcy, court judgments or tax liens, you pose a greater risk to the surety company. The price you pay for an Oregon auto dealer bond is higher to reduce the risk of future bond claims for the surety company.
How Do I Get an Oregon Auto Dealer Bond?
Licensed auto dealers in Ohio can start the process of obtaining an Oregon auto dealer bond by submitting a brief form online. You receive a quote for your bond based on the information you provide, and the surety company will work with you to finalize the process quickly.