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South Dakota Auto Dealer Bond

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What is a South Dakota Auto Dealer Bond?

In South Dakota, auto dealers must follow specific rules in order to operate a business legally. One of the criteria for meeting licensing requirements is obtaining a South Dakota auto dealer bond. This type of surety bond provides a safeguard to both customers who do business with the dealer and the state.

Should an auto dealer in South Dakota fail to meet its obligations under licensing regulations, such as provide misleading information or engage in fraudulent business practices, a claim can be made against the auto dealer's bond. Claims can be a costly issue for auto dealers, because although the surety company providing the bond pays the claim amount up front, the auto dealer is ultimately responsible for paying the amount back.

Who Needs a South Dakota Auto Dealer Bond?

There are several categories of auto dealers under South Dakota law. New and used auto dealers must have a license, as must mobile home dealers, boat dealers, trailer dealers, and motorcycle or snowmobile dealers. Each category of dealer is also required to secure a South Dakota auto dealer bond.

South Dakota Auto Dealer Bond Obligee Details

A South Dakota auto dealer bond works like any other surety bond in that it brings together three distinct parties under a contract. The auto dealer required to have the bond is known as the principal. The surety company provides the bond to the principal. The state's licensing agency requiring a bond to be in place is known as the obligee of the bond.

The obligee for South Dakota auto dealer bonds is as follows:

South Dakota Department of Revenue

Dealer Licensing

445 East Capitol Avenue

Pierre, South Dakota 57501

Phone: 605-773-4416

How Much Does a South Dakota Auto Dealer Bond Cost?

Obtaining your South Dakota auto dealer bond is a cost of doing business, but in most cases, the price an auto dealer pays is minimal. The surety company providing an auto dealer bond considers both the total amount of the bond required and the financial track record and personal credit history of the auto dealer.

First, the amount of the bond needed varies depending on the category into which the auto dealer falls. For instance, new and used auto dealers must have a bond of $25,000. A trailer dealer needs a bond of $10,000, while a snowmobile or motorcycle dealer needs a $5,000 bond. However, the bond amount is not the same as the price an auto dealer pays for a bond.

Because the surety company takes on some risk in issuing a bond, a check of personal credit is necessary to determine pricing. Typically, South Dakota auto dealer bonds cost 1 to 10% of the bond amount based on financial history. A lower credit score or past issues with credit results in a higher bond price.

How do You Get a South Dakota Auto Dealer Bond?

Auto dealers in South Dakota may start the process of getting a bond by submitting a short online application. The surety company will need details on the type of bond requested, the amount, and the financial history of the applicant. After these details are reviewed, a bond quote is provided along with instructions on how to finalize the process. A South Dakota auto dealer bond must be renewed each year.


Frequent Questions

What does an auto dealer bond cost?

Costs are a percentage of the auto dealer bond amount that's required of you, which is based on your personal credit. Use our bond pricing tool to get a quick ballpark estimate.

Can I get a bond with bad credit?

Yes. You can get approved for a bond regardless of your credit situation. However, the price will increase. You can apply to get an instant approval. As the largest writer of surety bonds in the U.S., we have access to high risk markets that many other agencies do not.

How long does the application take?

It only takes minutes, as we can approve you for your bond instantly online. You can get a no obligation quote on our website at any time.

Can I get auto dealer bond insurance to protect myself?

No. An auto dealer bond does not protect you, it protects the public. However, you can protect yourself or your customers by getting fidelity bonds.


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Our company has been with JW Surety for several years now so when we needed to obtain a bond for a new company, we immediately went to them for help. Our rep, Melissa, was extremely helpful and prompt which made the process extremely easy for me.
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Trying to get a local Surety Bond was like driving a car on three tires. I searched Surety Bonds and found JW Surety Bonds. I got online and filled out the information and with in 30 minutes received a response from Melissa. She was informative, friendly and helpful. One more super satisfied customer.

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About JW Surety Bonds
We are a family owned and operated agency established in 2003. We started with just two people, and grew to become the largest volume bond producer in the nation with 50+ employees. Since day one, our team focus has been on providing real-time online quotes, an easy process, and the best in claims defense. Learn more about our company.