Florida Department of Highway Safety and Motor Vehicles (FLHSMV) requires all new and used car dealership owners selling motor vehicles, recreational vehicles and mobile homes to obtain bond coverage as a part of their dealership license application process in the State of Florida.
These Dealer’s Surety Bonds help ensure that dealers conduct business ethically and lawfully. These types of bonds are intended to protect and provide compensation for damages when dealers do not comply with Florida’s provisions of licensing laws. Common examples of noncompliance that could result in a claim are fraudulent odometer changes and failure to provide an authentic vehicle title.
How does a Florida auto dealer bond work?
There are three parties to a surety bond. The State of Florida State Department of Highway Safety & Motor Vehicles, the entity that requires the bond, is the Obligee. The auto dealer applying for the bond is the Principal and the surety company is the Obligor. The surety company provides a guarantee to the FLHSMV that in the event of a valid claim, the surety company will provide payment to them (up to the amount indicated on the bond form) and seek reimbursement from the auto dealer for the amount that was paid out on the claim and the legal fees incurred.
Which Florida Dealer Bond should I purchase?
There are a multitude of dealer license types available based on the business type and operations. Determining which bond you need can be confusing if you don’t know which license type you need. The following breakdown will assist you in determining the correct license type.
Vehicle Franchised dealer (VF): Allows a licensed dealer to engage in buying, selling, servicing, repairing, or dealing new motor vehicles under an established agreement with a manufacturer, importer or distributor.
Vehicle Independent dealer (VI): Allows a licensed dealer (other than a wholesale or franchised motor vehicle dealer) to buy, sell, service, repair or deal used motor vehicles
Vehicle Wholesale dealer (VW): Allows a licensed dealer to engage exclusively in the business of buying, selling or dealing in motor vehicles at wholesale or through motor vehicle auctions.
Vehicle Auction dealer (VA): Allows licensed auction dealers to sell motor vehicles and recreational vehicles by the bid process to buyers that are licensed motor vehicle dealers.
Salvage dealer (SD): Allows a licensed salvage dealer to engage in the business of acquiring wrecked or salvaged vehicles with the intent to resell them or for parts.
Mobile home dealer (DH): Allows licensed mobile home dealers to buy, sell or deal in mobile homes.
Recreational motor vehicle dealer (RV): Allows a licensed recreational vehicle dealer to engage exclusively in buying, selling or brokering new recreational vehicles.
Recreational used motor vehicle dealer (RU): Allows a licensed recreational vehicle dealer to engage exclusively in buying and selling used recreational vehicles.
Need Assistance Obtaining a Surety Bond for your Florida Auto Dealer License?
Even if you have gone through this process before, or if it is your first time obtaining a Florida Auto Dealer Bond, https://ezsuretybonds.com can assist you with making this process quick, straightforward, and cost efficient.
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