Minnesota Motor Vehicle Dealer Bonds (Car, Boat, Snowmobile, Horse Trailer or Moped Dealers)

Get a Free Quote for Your Minnesota Motor Vehicle Dealer Bond Today

Who Is Required To Purchase an Auto Dealer Bond In Minnesota?

There are 12 dealer license types in Minnesota. All dealer types are required to purchase a surety bond.

Here are the dealer types:

• New vehicle dealer
• User vehicle dealer
• Vehicle salvage pool
• Vehicle auctioneer
• Vehicle lessor
• Limited used vehicle
• Vehicle wholesaler
• Vehicle broker
• Scrap metal processor
• Drive-away/in-transit
• Motorized bike, boat, and snowmobile dealer

Every dealer is required to purchase a $50,000 auto dealer bond except motorized bike, boat and snowmobile dealers, who are required to purchase a $5,000 bond.

Why is a Minnesota Motor Vehicle Dealer Bond Required?

The Department of Public Safety sets the licensing requirements with the goal of having responsible and reputable dealers serving the public across the state.

This licensing process includes:

• Purchasing a surety bond as described above
• Purchasing the minimum levels of liability insurance
• Meeting the building building and zoning requirements
• Paying all the applicable application fees
• Completing any additional requirements based on the city's population

Despite all of the licensing requirements, every year there will be a few dealerships that financially harm their customers on purpose to make more money.

Examples of these actions include:

• Improperly transferring a title
• Selling vehicles with no title
• Misrepresenting vehicle information like mileage, manufacture year, or condition
• Stealing customer deposits
• Failing to pay the correct sales taxes to the Department of Revenue

If a customer falls victim to these or similar actions by a licensed dealer, the customer can make a claim against the auto dealer surety bond for financial compensation.

The the maximum of any one claim and the total of multiple claims is restricted by the bond amount, $50,000 or $5,000 depending on your license type.

How Much Does Minnesota Auto Dealer Bond Cost?

There are two factors that will affect the bond price:

• Your bond amount
• A rate quoted from a surety

The Minnesota auto dealer bond is credit driven. A surety, an insurance company that underwrites dealer bonds, will assess each applicant using these three factors:

• Personal credit or owner and owners
• Dealer industry and experience
• Prior bond claims if an owner has been licensed in the past

Based on the sureties assessment, they will quote a rate.

The rate quoted multiplied by your bond amount is the price you pay.

It's a simple process, but every surety is different and will quote vastly different rates.

We've seen different sureties quote rates that are two to three percentage points different for the same applicant.

And this is why using a surety agency can end up saving you hundreds, even thousands of dollars when you purchase your bond.

How to Easily Save Hundreds of Dollars When Purchasing Your Bond

At Surety Bonds Direct, we are a surety agency. We work with the highest A-rated sureties that specialize in vehicle dealer bonds.

• We will price shop for you when you request a price quote
• We'll collect all the different rates from these sureties
• And deliver to you the lowest possible rate and price

It's our job to make purchasing your surety bond easy.

Minnesota Auto Dealer Bond Pricing Example

Here's some example pricing based on the $50,000 bond amount. The rates in the table are from really good to about average.

Pay attention to the price differences. You can see how significant these differences can be.

The money saved can pay for the application fees or pay for any dealer plates you might end up purchasing.

Getting your exact pricing within 24 hours costs you nothing. Plus you're under no obligation to purchase the bond.

Click here and complete our quote form. It's fast to fill out and if you prefer to speak with a person, call a bond specialist at 1-800-608-9950.

How Long Does The Minnesota Auto Dealer Bond Last?

Once you receive pricing and you're ready to purchase, all you have to do is complete an online order form.

After your payment is processed our bond issuance team will prepare your bond with the:

• Correct bond form
• Required signatures and seals
• Power of attorney

Once your bond is complete you will receive an email with your bond attached.

All you have to do is submit it with your application.

Renewing Your Minnesota Dealer Bond

As you purchase your bond, you will choose an activation date. This is called the effective date.

Your dealer bond will have to be renewed 12 months from this date.

During the quote and purchase process, you'll work with your dedicated bond specialist.

As your expiration date approaches, your bond specialist will contact you 30 to 45 days in advance with pricing ready to go so the renewal process is seamless.

Once you pay the renewal premium, you don't have to do anything else. Your bond is active and you can continue selling vehicles.

Motor Vehicle Dealer Bonds And Getting Your Minnesota Business License/Registration

Minnesota has a very simple licensing process compared to many states. Their website makes it easy to the exact requirement you need to meet based on your license type.

At a high level, the licensing steps are:

• Decide on your license classifications or classification
• Purchase your liability insurance
• Purchase your surety bond
• Based on your dealership location get proof of appropriate zoning
• Complete your application and pay all required fees

When you're ready to get the surety bond process completed click here and complete our quote form. It's fast to fill out and if you prefer to speak with a person, call a bond specialist at 1-800-608-9950.