What Is an Oklahoma Auto Dealer Bond?
Motor vehicle dealers in Oklahoma must comply with state rules for business licensing to operate a legal dealership. One of the requirements for getting an initial business license and maintaining it over time is securing an Oklahoma auto dealer bond.
As a type of surety bond, an Oklahoma auto dealer bond provides a safeguard to customers who do business with licensed auto dealers in the state.
Should a business transaction involve misleading information or fraudulent practices, a consumer has the right to file a claim against an Oklahoma auto dealer bond. If a claim is successful, compensation is paid to help cover financial losses caused by the auto dealer.
How Does an Oklahoma Auto Dealer Bond Work?
As an Oklahoma surety bond, an auto dealer bond involves three distinct parties.
The obligee is the state's licensing authority that requires a bond to be in place.
The licensed auto dealer is known as the principal, and the principal is required to obtain a bond so that they can run their business legally.
The surety company is the provider of the bond to the dealer. The surety pays any claims made against the bond, and the auto dealer must pay back the surety.
Oklahoma Auto Dealer Bond Obligee Details
Oklahoma auto dealer bond obligee details are as follows:
Oklahoma Used Motor Vehicle & Parts Commission
421 NW 13th, Suite 330
Oklahoma City, Oklahoma 73103
Who Needs an Oklahoma Auto Dealer Bond?
Not all auto dealers in Oklahoma are required to maintain an Oklahoma auto dealer bond. Under current law, all used and wholesale dealers that engage in the sale or exchange of motor vehicles must have a bond in place, but new auto dealers do not have a bond requirement.
How Do You Get an Oklahoma Auto Dealer Bond?
Licensed auto dealers can start the process of obtaining their Oklahoma auto dealer bond by submitting a short application online. The surety company reviews the application for the new bond and determines the bond premium.
Once the bond premium is paid, and proof of the bond is provided to the obligee, an Oklahoma auto dealer has met the bonding requirement.
How Much Does an Oklahoma Auto Dealer Bond Cost?
An Oklahoma auto dealer bond varies in price from one dealership to the next. This is because the surety company providing an auto dealer bond bases the cost on the amount of the bond as well as the financial stability of the auto dealer.
For used and wholesale auto dealers in Oklahoma, the amount of the bond required is $25,000. However, auto dealers do not pay this entire amount as the price of the bond. The surety company charges a bond premium, calculated as a percentage of the bond amount.
The bond premium an auto dealer pays ranges from 1 to 10 percent of the bond total. The percentage is determined by the surety company, based on an evaluation of the auto dealer applying for the bond.
Can I Get an Oklahoma Auto Dealer Bond with Bad Credit?
When credit history or bond claim history is an issue for you, you’ll be charged a higher bond premium. This is because you pose a higher risk to the surety. A healthy financial track record results in a lower bond premium for auto dealers.
How Do I Renew My Oklahoma Auto Dealer Bond?
Oklahoma auto dealer bonds need to be renewed every two years, by December 31, to stay compliant with current state laws. You’ll receive a reminder to renew your bond before your bond expires each year. If you miss the renewal date, your bond will be invalid and your business will be operating illegally.
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.