What is a Maryland Motor Vehicle Dealer Bond?
The State of Maryland Motor Vehicle Administration requires that motor vehicle dealers operating in the state post a Surety Bond of Vehicle or Trailer Dealer in conjunction with the licensing process. The surety bond amount varies based on the number of vehicles sold by the dealer annually and the dealer license type (e.g. new car, used car, motorcycle, wholesale, trailer, automotive dismantler & recycler, scrap processors, or emergency vehicle). When adding a new business location, a rider to the Surety Bond of Vehicle or Trailer Dealer is needed if the surety bond amount or other information has changed. The following table outlines the specific surety bond requirements by license type and vehicles sold.
RV Manufacturers, distributors, and dealers should see the separate bonding requirements new in 2023.
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Why is a Maryland Motor Vehicle Dealer Bond Required?
This surety bond ensures that the bonded motor vehicle dealer conducts business in full compliance with applicable Sections of the Transportation Article, of the Annotated Code of Maryland, and the Regulations of the Administrator of Motor Vehicles for the State of Maryland. This surety bond is issued for the benefit of the Administrator of Motor Vehicles of the State of Maryland and anyone harmed financially due to unlawful acts committed by the bonded vehicle dealer. This surety bond runs concurrently with the license period and remains in full force if renewed for subsequent license periods until canceled by the surety company by giving forty five days written notice to the Administrator of Motor Vehicles, State of Maryland. Regardless of the period in force, the surety bond liability is not cumulative from year to year, and the total liability is limited to the stated bond amount.
Motor Vehicle Dealer Bonds And Getting Your Maryland Business License/Registration
The following is an overview of key Maryland vehicle dealer licensing requirements.
- Application for Vehicle Dealers License (CS-042).
- Zoning Approval Form (CS-053).
- Department of Assessment and Taxation form/letter that verifies you are registered to do business in the State of Maryland using the name(s) indicated on your application.
- Completed Dealer Site Inspection. Prior to becoming licensed, an investigator will go to your place of business and inspect your location to ensure compliance with the Maryland Code of Regulations (COMAR).
- Repair Facility Contract (CS-125
- Dealer Orientation Request – Before a license can be issued, you must attend a dealer orientation.
- ERT Contract – All new licensees are required to contract with an Electronic Registration and Titling (ERT) provider. A copy of your ERT contract is required to be submitted along with your completed application.
- Criminal Background Check – All applicants/licensees must submit a Criminal Background Check. If you live or have lived in another state within the last year, you must provide a criminal record from that state in addition to the Maryland record check.
- Surety Bond of Vehicle or Trailer Dealer (CS-067A). The bond required is based on the number of vehicles you sold/ projected to be sold. The bond must be in the full name of the dealership including any trade name. It must reflect the full name of all officers, partners, or owners exactly as shown on the application.
- Workers’ Compensation Insurance
- Trader’s License (copy) – A copy of the trader’s license obtained from the Circuit Court in the jurisdiction where your business is located is required.
- Use and Occupancy Permit – Is required by applicants using a trailer as an office.
- Franchise Approval from Manufacturer
- New Vehicle Certification Form (CS-22)
- Additional items may be needed and exact requirements may vary based on applicant, license type or obligee discretion. Please see obligee and state links in the Other Helpful Information and Links section below or contact the obligee directly for more information.
The state of Maryland generally classifies licenses into the following categories:
- New Vehicle Dealers - Those who sell new vehicles under a franchise agreement with a licensed manufacturer or distributor.
- Used Vehicle Dealers - Those who sell used vehicles to the public and other dealers. A physical location suitable for retail sales from which the sales are conducted is required. Vehicle sales must be the principal or only business conducted at that location.
-
Wholesale Dealers - Those who buy, sell, and exchanges used vehicles with other dealers. They may purchase vehicle from the public but cannot sell retail to the public.
-
Motorcycle Dealers - Those who sell new motorcycles under a franchise agreement with a licensed manufacturer or distributor. May be licensed to sell only used motorcycles.
-
Emergency Vehicle Dealers - Those who sell new emergency vehicles under a franchise agreement with a licensed manufacturer or distributor.
-
Trailer Dealers - Those who sell new trailers under a franchise agreement with a licensed manufacturer or distributor. May be licensed to sell only used trailers.
-
Automotive Dismantler & Recyclers - Those who acquire vehicles to dismantle, destroy, or scrap for the sale of parts and materials.
-
Scrap Processors - Those having a facility to process vehicle scrap for re-smelting purposes.
Maryland Dealer Surety Bond Amounts
New Vehicle Dealer Surety Bond Amounts
| Number of Vehicles Sold | Bond Amount |
|---|---|
| 1-500 | $50,000 |
| 501-1,000 | $75,000 |
| 1,001-2,500 | $100,000 |
| Over 2,500 | $300,000 |
Used Vehicle Dealer Surety Bond Amounts
| Number of Vehicles Sold | Bond Amount |
|---|---|
| 1-250 | $15,000 |
| 251-500 | $25,000 |
| 501-1,000 | $35,000 |
| 1,001-2,500 | $50,000 |
| Over 2,500 | $150,000 |
Wholesale Dealer Surety Bond Amounts
| Number of Vehicles Sold | Bond Amount |
|---|---|
| 1-250 | $15,000 |
| 251-500 | $25,000 |
| 501-1,000 | $35,000 |
| 1,001-2,500 | $50,000 |
| Over 2,500 | $150,000 |
Trailer Dealer Surety Bond Amounts
| Type of Trailer | Bond Amount |
|---|---|
| Boat Trailer | $5,000 |
| Trailers under 15 feet | $5,000 |
| Trailers over 15 feet | $15,000 |
New Motorcycle Dealer Surety Bond Amounts
| Number of Vehicles Sold | Bond Amount |
|---|---|
| 1-500 | $50,000 |
| 501-1,000 | $75,000 |
| 1,001-2,500 | $100,000 |
| Over 2,500 | $300,000 |
Used Motorcycle Dealer Surety Bond Amounts
| Number of Vehicles Sold | Bond Amount |
|---|---|
| 1-250 | $15,000 |
| 251-500 | $25,000 |
| 501-1,000 | $35,000 |
| 1,001-2,500 | $50,000 |
| Over 2,500 | $150,000 |
New Emergency Vehicle Dealer Surety Bond Amounts
| Number of Vehicles Sold | Bond Amount |
|---|---|
| 1-500 | $50,000 |
| 501-1,000 | $75,000 |
| 1,001-2,500 | $100,000 |
| Over 2,500 | $300,000 |
Used Emergency Vehicle Dealer Surety Bond Amounts
| Number of Vehicles Sold | Bond Amount |
|---|---|
| 1-250 | $15,000 |
| 251-500 | $25,000 |
| 501-1,000 | $35,000 |
| 1,001-2,500 | $50,000 |
| Over 2,500 | $150,000 |
Title Service Surety Bond Amount
| Number of Titles | Bond Amount |
|---|---|
| N/A | $25,000 |
Manufacturer, Second Stage Manufacturer, Distributor, or Factory Branch License Surety Bond Amounts
| Number of Vehicles Sold | Bond Amount |
|---|---|
| 1-50 | $25,000 |
| 51-500 | $50,000 |
| 501-10000 | $100,000 |
| Over 10,000 | $300,000 |
Additional Maryland Motor Vehicle Dealer Bond Resources & Links
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