Florida Surety Bond Quote

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Learn the basics of Florida surety bonds and why they’re crucial protection for your dealership and business.

Why Do Dealerships Need Florida Surety Bonds?

If you own an auto dealership in Florida, it’s important to understand what surety bonds are and why they are necessary. Below, explain what surety bonds are, how they work, and why they are important for auto dealership owners.

Large Dealership Building in Florida Requiring a Surety Bond For Protection

What are Surety Bonds?

Surety bonds are contracts between three parties: the principal (the auto dealership owner), the obligee (the state of Florida), and the surety (the bonding company). Essentially, the surety bond is a guarantee that the principal will fulfill their obligations to the obligee. In the case of auto dealerships, the state of Florida requires surety bonds to ensure compliance with regulations. The first step in meeting these obligations is to get a Florida surety bond quote.

How do Surety Bonds Work?

After a dealer gets a Florida surety bond quote and obtains a bond, they pay a premium to the bonding company. A premium is a percentage of the total bond amount. In addition, the bonding company then provides the bond to the obligee (in this case, the state of Florida), who can make a claim against the bond if the auto dealership fails to meet their obligations.

If a claim is made against the bond, the surety will investigate the claim and if it is found to be valid, they will pay out the claim up to the bond amount. Finally, the auto dealership is then responsible for reimbursing the surety for any claims paid out.

Why Do Auto Dealerships Need Surety Bonds?

Auto dealerships are required by the state of Florida to have surety bonds as a form of consumer protection. Specifically, the bonds ensure that auto dealerships comply with state laws and regulations. Additionally, they provide financial protection for consumers in case the dealership engages in fraudulent or illegal activities. Surety bonds can also help protect the dealership by providing a way to resolve disputes and avoid litigation.

Florida Surety Bond Types

Franchise Motor Vehicle Dealer Bond

VF – Individuals licensed to sell new vehicles in Florida must obtain a franchise motor vehicle dealer surety bond. The bond form ensures that auto dealers comply with Florida statutes and fulfill written contracts when selling or exchanging vehicles.

Independent Motor Vehicle Motor Dealer Bond

VI – Individuals licensed to sell used vehicles in Florida must obtain an independent motor vehicle dealer surety bond. Florida Statutes 320.27 mandates filing a $25,000 surety bond as part of the state’s motor vehicle dealer license application process. The bond form ensures that auto dealers comply with Florida statutes and fulfill written contracts when selling or exchanging vehicles.

Wholesale Dealer Bond

VW – Applicants seeking a wholesale motor vehicle dealer license in Florida must obtain a wholesale dealer surety bond. Wholesale dealers can only sell vehicles to other dealers, not to the public. This bond guarantees that the dealer will comply with state regulations for conducting legal business. It also provides financial security to the public. If a wholesale dealer violates regulations, such as committing fraud during vehicle sales, a claim can be filed against their bond.

Salvage Dealer Surety Bond

SD – Anyone acquiring salvaged or wrecked motor vehicles for resale or parts must be licensed in Florida. Florida salvage dealer surety bonds ensure the principal (salvage dealer) complies with all provisions of Chapters 319 and 320 of the Florida Statutes. These bonds provide protection to anyone who suffers a loss due to a violation. If financial damages occur, the surety will pay up to the bond’s penal sum to resolve the claim. The principal must then reimburse the surety for all monies paid out, including attorney fees. The surety’s aggregate liability shall not exceed the bond’s penal sum in any one year.

Recreational Vehicle Dealer Bond

RV/RU – Florida requires recreational vehicle dealers to post a financial guarantee bond. This bond ensures dealers comply with state regulations and fulfill their contractual obligations. It protects consumers’ interests by providing financial recourse for any damages, liabilities, or violations caused by the dealer during business operations.

Mobile Home Dealers Surety Bond

DH – The Florida Department of Highway Safety and Motor Vehicles requires mobile home dealers in Florida to post a surety bond. Dealers must provide a $25,000 bond, manufacturers need a $50,000 bond, and installers require a $5,000 bond. Anyone buying, selling, dealing, displaying, or offering one or more mobile homes within 12 months qualifies as a dealer or broker. The surety bond is issued on the Florida Division of Motorist Services HSMV form 860183.

Freight Broker Bond

BMC-84 – The Federal Motor Carrier Safety Administration (FMCSA) requires freight brokers and freight forwarders in the U.S. to provide a $75,000 freight broker surety bond. To get a freight broker license, you must obtain a competitive Florida surety bond quote and secure the bond. This freight broker bond is also known as the BMC-84 bond.

Crucial Protection for Consumers and Dealerships

Florida surety bonds play a crucial role for auto dealerships in Florida. Most importantly, they are essential for doing business, so shop around for the best Florida surety bond quote. These bonds protect both consumers and the dealership, ensuring compliance with regulations and providing a way to resolve disputes.

As an auto dealership owner, you need to understand the role of surety bonds. Specifically, obtain the necessary bonds to limit risk and protect your business and your customers. Trust the experienced agents at DSI for the most competitive Florida surety bond quote now.