Pennsylvania Auto Dealer Bond

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What is a Pennsylvania Auto Dealer Bond?

Any car dealer operating in the state of Pennsylvania must hold a valid license to do so. In addition to an auto dealer license, a Pennsylvania auto dealer bond is also a requirement. The auto dealer bond works as a guarantee that licensed dealerships will interact with customers and transact business according to state laws.

Like other Pennsylvania surety bonds, an auto dealer bond is an agreement between three parties. The principal, the auto dealership, is the party responsible for obtaining a bond. The surety provides the bond to the principal. The obligee, the Pennsylvania Bureau of Motor Vehicles, requires an auto dealer bond as part of the licensing process.

Who is Required to Get a Pennsylvania Auto Dealer Bond?

Like other states requiring auto dealers to meet bond minimums, Pennsylvania law states that any individual or entity engaging in the sale or purchase of motor vehicles for a profit is considered an auto dealer. Both new and used auto dealers must be licensed to do business, and they must secure a Pennsylvania auto dealer bond as part of the process.

Obligee Information for Pennsylvania Auto Dealer Bonds

State law in Pennsylvania dictates the licensing and bonding requirements set forth for auto dealers operating within state lines. Part of the licensing regulations include securing a Pennsylvania auto dealer bond, posted to the obligee. In Pennsylvania, the obligee of an auto dealer bond is the State Board of Vehicle Manufacturers, Dealers, and Salespersons under the Pennsylvania Department of State. The contact information for the obligee is as follows:

State Board of Vehicle Manufacturers, Dealers, and Salespersons

PO Box 2649

Harrisburg, Pennsylvania 17105

Phone: 717-783-1697

What Does a Pennsylvania Auto Dealer Bond Cost?

Licensed auto dealers selling either new or used vehicles need to obtain a Pennsylvania auto dealer bond of at least $20,000. However, dealers are not required to pay the full amount to secure the bond. Instead, bonds are priced as a percentage of the total, usually ranging from 1 to 10%.

The surety company calculates the price you pay for a Pennsylvania auto dealer bond based on your personal credit score and business financial standing. A low credit score, below 599, may indicate that you are a high risk of a future bond claim. Because claims are paid by the surety but then repaid by you as the auto dealer, having bad credit increases the cost of your auto dealer bond.

How Do You Get a Pennsylvania Auto Dealer Bond?

You can get a Pennsylvania auto dealer bond by submitting a short form online. A free quote is provided based on your personal and business details, and the surety company will work with you to complete your application and the bonding process for your auto dealer bond.

Terms and Expiration Date for a Pennsylvania Auto Dealer Bond

There is no required expiration date for a Pennsylvania auto dealer bond. Instead, bonds are issued on a continuous basis and renewed at the same time an auto dealer’s license is renewed. Auto dealers must be sure to renew both their license and their Pennsylvania auto dealer bond in order to remain compliant with state laws and regulations.

Frequently Asked Questions

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.

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.

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.

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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