What Is an Ohio Auto Dealer Bond?
Auto dealers in Ohio are required to get an auto dealer license. Part of the licensing process is securing an Ohio auto dealer bond. This bond protects customers from illegal business practices.
If an auto dealer does not fulfill their legal obligations when working with the public, then a claim can be made against the bond to cover a customer’s financial losses or damages.
How Does a Ohio Auto Dealer Bond Work?
An Ohio auto dealer bond is a three-party contract.
The obligee is the state licensing authority requiring the bond. In this case, the obligee is the Bureau of Motor Vehicles.
The auto dealer is known as the principal. The principal is required to obtain a bond so that they can legally operate their dealership in the state.
The surety company provides the bond to the principal. An Ohio auto dealer bond is guaranteed by the surety company. Legitimate claims are paid by the surety first, and then the licensed auto dealer is required to repay the amount of the claim.
Ohio Auto Dealer Bond Obligee Information
The Ohio Administrative Code, section 4501;1-3-1 1, gives the Bureau of Motor Vehicles under the Attorney General’s Office the authority to dictate licensing requirements for Ohio auto dealers. One of these requirements is securing an Ohio auto dealer bond, which is submitted to:
Ohio Attorney General
Consumer Protection Section
Attn: TDRF Unit Surety Bond
30 E. Broad Street, 14th Floor
Columbus, OH 43215
Who Needs an Auto Dealer Bond in Ohio?
Any licensed auto dealer operating in the state of Ohio must have an auto dealer bond that meets Ohio surety bond minimums. Ohio auto dealers are required to have a license and the appropriate bond amount posted to the Attorney General’s Office if they engage in the sale of motor vehicles to individuals or businesses in the state.
How Do I Get an Ohio Auto Dealer Bond?
You can get an Ohio auto dealer bond by submitting a brief form online. The process starts with an initial quote based on the factors listed above. You then submit an application with the surety company and pay for your Ohio auto dealer bond once approved.
What Does an Ohio Auto Dealer Bond Cost?
Licensed auto dealers must have an Ohio auto dealer bond of either $20,000 or $25,000, depending on the type of dealership in operation. An auto dealer does not have to pay the full bond amount to comply with state requirements. Only a percentage of the bond must be paid to the surety, typically ranging from 1 to 10 percent.
Can I Get a Ohio Auto Dealer Bond with Bad Credit?
An Ohio auto dealer bond is priced based on the personal credit history, the business financials, and the experience of the auto dealer.
Negative marks on your credit report, including judgments, liens, or bankruptcy, indicate you are a higher risk to the surety company. To help offset this risk, the percentage of your Ohio auto dealer bond is higher than for someone with excellent or good credit.
Terms and Expiration Date of Ohio Auto Dealer Bonds
Ohio auto dealer bonds are renewable, and they are in place for the same amount of time the auto dealer’s license is effective. There is no stated expiration date for Ohio auto dealer bonds, but these must be renewed in line with an auto dealer’s license to remain in regulation with the law.
How Do I Renew My Ohio Auto Dealer Bond?
You will need to renew your auto dealer bond annually at the same time that you renew your auto dealer license. You’ll receive a renewal notice each year when it is time to do so. It is important that you don’t ignore this renewal notice, because letting your bond go invalid is a mistake.
Frequently Asked Questions
Yes. You can get you 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.