Georgia Auto Dealer Bonds
Surety Bond Professionals is a family-owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all your Georgia auto dealer bond needs.
What Are They?
Georgia auto dealer bonds are categorized as license and permit bonds because purchasing one is a mandatory step in the licensing process for certain types of dealers. Without a current Georgia auto dealer bond, these dealers cannot operate legally within the state.
A Georgia auto dealer bond is a dealer’s guarantee to conduct business in compliance with all applicable statutory requirements in the state. The bond protects consumers, not dealers. It also protects the licensing entity in Georgia from being held liable for any financial harm for having issued a license to a dealer whose unlawful or unethical business practices have caused financial harm to a customer.
A Georgia auto dealer bond guarantees that the dealer will operate in compliance with all applicable state laws and regulations. It also guarantees the availability of funds to compensate the state and consumers for financial losses caused by a dealer’s violation of the terms of the surety bond agreement.
Who Needs Them?
In Georgia, used auto dealers are licensed by the State Board of Registration, Used Motor Vehicle Dealers Division, and are required to purchase a $35,000 Georgia auto dealer bond. While some municipalities mandate licensing and bonding of new car dealers, there is no statewide licensing or bonding requirement for them.
Allowing your Georgia auto dealer bond to lapse can result in license suspension or revocation.
Speak with a Surety Bond Professionals agent today to discuss your bonding needs.
How Do They Work?
There are three parties to the surety bond agreement for a Georgia auto dealer license, which is a legally binding contract. In the language of surety bonds, these three parties are the obligee, the principal, and the surety:
- The “obligee,” the party requiring the bond, is the State Board of Registration.
- The “principal” required to purchase the bond is the auto dealer.
- The “surety” is the surety company underwriting and issuing the bond.
The obligee can file a claim against a Georgia auto dealer bond to collect tax payments and registration fees the dealer has failed to remit. Consumers can file their own claims to recover damages resulting from the principal’s unlawful or unethical actions, such as falsifying an odometer reading, failing to disclose damage to a vehicle, or not providing a proper certificate of title.
The surety will only approve a claim for payment after investigating it and finding it to be valid. Typically, the obligee will pay the claim on behalf of the principal, which creates a debt that the principal is legally obligated to repay.
What Do They Cost?
The main consideration in establishing the premium rate for a given bond is the principal’s personal credit score. Paying claims on the principal’s behalf entails a certain amount of risk for the surety, namely the risk of non-repayment. That risk is considerably lower when the principal’s personal credit score is high—a reliable indicator of creditworthiness.
A principal with good credit will typically pay a premium that’s in the range of 1% to 2% of the $35,000 required bond amount.
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Our surety bond professionals will get you the Georgia auto dealer bond you need at a competitive rate.