What Is a New Hampshire Auto Dealer Bond?
Motor vehicle dealers in nearly all states are required to maintain a license in the state they operate. Having an auto dealer bond is typically part of the licensing process. To comply with current regulations and rules, auto dealers operating in New Hampshire must have a New Hampshire auto dealer bond.
A New Hampshire auto dealer bond is a type of surety bond that protects customers who engage in business with licensed auto dealers. It also safeguards the state if an auto dealer does not meet their legal obligations.
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.
How Does a New Hampshire Auto Dealer Bond Work?
When a New Hampshire auto dealer bond is put in place, it represents a contract between three parties.
The state or local licensing authority requiring a bond to be in place is known as the obligee of the bond.
The licensed auto dealer required to have the bond is known as the principal.
The surety company provides the bond to the auto dealer and pays any successful claims made on the bond. The auto dealer must then repay the claims to the surety.
New Hampshire Auto Dealer Bond Obligee Details
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
Who Needs a New Hampshire Auto Dealer Bond?
Auto dealers are 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 required for each category of auto dealer.
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.
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 no less than $25,000. 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 percent 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 taken into account because the surety company takes on some risk in providing a bond to an auto dealer.
Can I Get a New Hampshire Auto Dealer Bond with Bad Credit?
You can obtain a bond with bad credit, but if credit has been an issue for you in the past, then the bond premium you pay will be on the higher end of the range for a New Hampshire auto dealer bond.
How Do I Renew My New Hampshire Auto Dealer Bond?
New Hampshire auto dealer bonds must be renewed annually in order to remain compliant with the law. You’ll receive a renewal notice before your bond is set to expire each year. If you fail to renew your bond, it can become invalid.