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.
Who is Required to Have an Oregon Auto Dealer Bond?
According to the laws of the state, Oregon auto dealers required to secure an auto dealer bond are individuals or entities that:
- Engage in purchasing, selling, brokering, or trading of vehicles for a profit
- Display new or used vehicles for sale
- Act as an agent for owners of vehicles to complete a purchase or sale
Oregon Auto Dealer Bond Obligee Details
Under the Oregon Revised Statute 822.005, the Oregon Department of Transportation has the authority to impose licensing requirements on auto dealers. Part of the licensing process is securing an Oregon auto dealer bond that is posted to the Department of Motor Vehicles Business Regulation Section as the obligee. Contact information for the department is listed below:
Oregon Department of Motor Vehicles
Business Regulation Section
East Annex Building
1965 Lana Ave NE
Salem, OR 97314
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.
Auto Dealer Bond Expiration Date and Terms in Oregon
Oregon auto dealer licenses have a three-year term and are required to be renewed at the end of that term. Auto dealer bonds for Oregon auto dealers have the same term as the license, which means the bond premium may be prorated depending on when the bond is secured. Oregon auto dealer bonds are renewed through the surety company, and renewal notices are sent out at least one month in advance.