What is a Florida Auto Dealer Bond?
In the state of Florida, licensed car dealers are required to secure a Florida auto dealer bond. A Florida auto dealer bond is a type of surety bond that ensures dealerships operate according to state and federal rules regulating auto dealers. This surety bond is meant to help protect customers of an auto dealership doing business in Florida.
Like other surety bonds, a Florida auto dealer bond is a three-party agreement. The contract involves the auto dealer, also known as the principal, the obligee, which is the state agency requiring the bond, and the surety company providing the bond. When a car buyer is harmed by a dealership, they can make a claim against the Florida auto dealer bond to cover financial losses.
Florida Auto Dealer Bond Obligee Details
Any licensed auto dealer operating in Florida must secure a surety bond. This requirement is part of the licensing process detailed under Florida Statutes 320.27, 320.77, and 320.771.
The state agency, or obligee, requiring bonds to be in place for licensed Florida auto dealers is the Florida Highway Safety and Motor Vehicles agency, or FLHSMV. Auto dealers can contact FLHSMV for assistance with licensing or surety bond questions through the following details:
Florida Highway Safety and Motor Vehicles
2900 Apalachee Parkway, Room A312
Tallahassee, Florida 32399
What Does a Florida Auto Dealer Bond Cost?
Auto dealers in Florida are required to have a bond of no less than $25,000. However, you are not required to pay this entire amount up front. Instead, a Florida auto dealer bond is priced as a percentage of the $25,000 bond, typically ranging from 1 to 10%. The percentage of the Florida auto dealer bond you pay depends on your credit score, business finances, and experience in the industry.
Florida auto dealers with less than perfect credit can still obtain the surety bond they need, but the price they pay is on the higher end of the percentage range. For example, their rate may be as high as 10% which equals $2,500.
How Do I Get a Florida Auto Dealer Bond?
Getting a Florida auto dealer bond is a relatively easy process. You can submit a request for a quote online at no cost, and then complete a brief application. Once reviewed, you receive the Florida auto dealer bond rate quote based on the factors mentioned above.
Renewing a Florida Auto Dealer Bond and Expiration Dates
For auto dealers already licensed in the state of Florida, getting a new auto dealer surety bond is not necessary. Instead, auto dealer bonds are renewed each year before reaching the expiration date. For Florida auto dealers that are associated with a franchise, the expiration date for an auto dealer bond is December 31.
Independent auto dealers typically need to renew their auto dealer bond by April 30 each year. Auto dealers securing a new bond at any other time of the year may have the bond premium prorated based on the future expiration date.