Georgia Auto Dealer Bonds
Learn more about Georgia Auto Dealer bonds, and get bonded today with Surety Bond Professionals.
What Are They?
A Georgia auto dealer bond is a type of license and permit bond issued to used car dealers operating within the state. The purpose of the bond is to ensure that used car dealers conduct their business in compliance with all applicable laws of the state of Georgia and uphold certain industry standards. The bond provides financial protection for consumers in the event that they suffer a financial loss because of the unlawful or unethical actions of a licensed Georgia used car dealer.
Georgia Used Car Dealer licenses are good for two years. However, regardless of when you first received your dealer license, it will expire on March 31 of the next even-numbered year. You must always have a valid surety bond in place in order to avoid revocation of your used car dealer license.
Here’s a quick look at the most important information about Georgia motor vehicle dealer bonds:
- Required Bond Amount: $35,000
- Premium: $350 minimum (1%)
- Effective Date: April 1, 2020
- End Date: March 31 of next even-numbered year
Who Needs Them?
Anyone applying for a license as a used car dealer in Georgia must obtain a $35,000 surety bond. You’ll need a Georgia Used Car Dealer license if you sell five or more used vehicles within a 12-month period.
Some municipalities require new car dealers and franchise owners within their jurisdiction to be licensed and bonded locally. In Georgia, however, there is no statewide license and no state-level bonding requirement for dealers who sell only new vehicles.
How Do They Work?
A surety bond agreement is a legally binding contract among three parties known as the obligee, the principal, and the surety:
- The obligee is the party requiring the purchase of the bond, the Georgia Motor Vehicle Division (MVD).
- The principal is the party required to purchase the bond, the used car dealer.
- The surety is the company that underwrites and issues the bond.
Each party has specific roles and responsibilities under the terms of the surety bond agreement. The agreement identifies the specific statutes the principal must comply with in order to avoid violations. Any consumer who suffers a financial loss because the principal does commit a violation has the right to file a claim against the bond.
What Happens When a Claim is Filed?
The first thing that happens when a claim is filed is that the surety investigates to ensure the claim is valid. Ideally, the principal will pay all valid claims in a timely manner, but that often is not the case.
If the principal doesn’t pay a claim within a reasonable period of time, the surety will pay it—but only as an advance payment on behalf of the principal. The terms of every surety bond agreement indemnify the surety and make the principal solely the responsible for paying claims. Consequently, the principal is legally obligated to reimburse the surety for all such advance payments.
What Do They Cost?
The annual premium for a Georgia used car dealer bond is a small percentage of the $35,000 bond amount required by the obligee. This is known as the premium rate. Exactly what that percentage is will depend on your personal credit score and financial circumstances.
If your credit is good, you’ll likely pay a premium rate of somewhere between 1% and 3%, which would make your annual premium for the $35,000 bond between $350 and $1,050. If your credit is poor, you may pay a higher premium.
Get Bonded Today
Apply online or call Surety Bond Professionals today to get the $35,000 bond you need for your Georgia auto dealer license.