Idaho 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 of your Idaho auto dealer bond needs.
What Are They?
An Idaho auto dealer bond is categorized as a license and permit bond because purchasing one is a mandatory step in the dealer licensing process. The bond obligates the dealer to comply with all applicable laws and regulations governing auto sales in the state of Idaho. Any violation that causes the state or a consumer to incur a financial loss gives the injured party the right to file a claim against the bond and be compensated for damages.
Who Needs Them?
In Idaho, anyone selling more than five vehicles within a calendar year must obtain a dealer’s license from the Idaho Transportation Department, Division of Motor Vehicles (DMV). To become licensed or renew an existing license, every dealer must purchase an Idaho dealer bond. The amount of the bond depends on the specific type of dealer license:
- Wholesale dealers—$40,000
- Retail dealers—$20,000
- Retail dealers selling only motorcycles, snowmobiles, ATVs and UTVs—$10,000
Failure to maintain an active bond in force at all times can result in license suspension or revocation.
Speak with a Surety Bond Professionals agent today to discuss your bonding needs.
How Do They Work?
An Idaho auto dealer bond is legally binding on all three parties to the surety bond agreement, namely:
- The “obligee” requiring the bond—the Idaho DMV;
- The “principal” purchasing the bond—the auto dealer;
- And “surety”— the bond’s guarantor.
When a claim is filed against an Idaho auto dealer bond, the surety will first investigate to make sure it’s legitimate. Then, although the legal obligation to pay claims belongs solely to the principal, the surety will most likely pay the claim on the principal’s behalf, creating a debt that the principal must, by law, repay to the surety. Failing to repay that debt can result in the surety taking legal action against the principal to recover the funds.
What Do They Cost?
Multiplying the required bond amount by the premium rate the surety set for the principal yields the annual premium cost for an Idaho auto dealer bond. The premium rate is determined through an underwriting process that assesses the risk of the surety not being repaid by the principal for claims paid on the principal’s behalf. The best predictor of that risk is the principal’s personal credit score.
A principal with a high credit score can be expected to continue being responsible about paying debts and therefore is considered a low risk. Conversely, a low personal credit score is a warning sign that the premium rate should be higher. Depending where a given principal falls on the risk continuum, the premium rate could be as low as 1% or even a bit less or as high as 3%.
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Our surety bond professionals will get you the Idaho auto dealer bond you need at a competitive rate.