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. Learn how to get an Idaho car dealer license, and contact us today to request a quote on the bond you need.
What Are the Different Types of Idaho Auto Dealer Licenses?
Every motor vehicle dealer license issued in Idaho is either a retail license or a wholesale license. Those two broad categories are further divided according to the types of vehicles sold. There are five dealer license types for the sale of new vehicles, which include watercraft, RVs, trailers, snowmobiles, and ATVs in addition to cars and trucks.
The most commonly issued dealer license allows the sale (retail or wholesale) of all used vehicles of any type, including trailers, ATVS, snowmobiles, and so on; this type of license is the focus of this article.
What Are the Steps in the Licensing Process?
There are several things you’ll have to do before applying for your Idaho auto dealer license, such as:
- Calling the Idaho Dealer Team at (208)334-8681 to make sure that the name you’ve chosen for your dealership is not already in use by another dealer
- Selecting a location and getting local zoning approval
- Forming a business entity and getting a Federal Employer Identification Number (FEIN) from the IRS
- Getting a Seller’s Permit from the Idaho Tax Commission
- Obtaining liability insurance for the dealership
Steps specific to the licensing process include:
- Purchasing an Idaho auto dealer bond ($20,000 for retailers; $40,000 for wholesalers and ($10,000 for dealers selling only motorcycles, ATVs, UVs, truck campers, and snowmobiles)
- Completing the Application for Vehicle or Vessel Dealership License
- Submitting the completed application and payment of fees to DMV in Boise
- Passing a business location inspection.
Once your location has passed inspection, you’ll receive your dealer license.
Why is an Idaho Auto Dealer Bond Required?
The reasons behind the Idaho auto dealer bonding requirement are:
- The bond guarantees the dealer’s compliance with applicable state laws and regulations, including the payment of taxes and any fines or fees owed to the state.
- It indemnifies the state of Idaho and the Idaho DMV against any liability for damages consumers experience because of the unlawful acts of a licensed auto dealer.
- The bond provides a source of funds for compensating consumers for such damages.
While Idaho permits a cash bond or certificate of deposit in lieu of a surety bond, most dealers prefer not to tie up their cash or credit and purchase a surety bond instead.
How Are Idaho Auto Dealer Bond Claims Paid?
An Idaho auto dealer bond is a legally binding contract between these three parties:
- The “obligee” requiring the bond is the Idaho Department of Motor Vehicles.
- The “principal” is the auto dealer, who must purchase the bond and is legally obligated to pay all valid claims.
- The “surety” is the company that guarantees the bond and the payment of claims.
Even though it is the principal’s legal responsibility to pay claims, in most cases the surety will pay a claim initially, in essence extending credit to the principal. The principal must then repay that debt to the surety. The surety can take legal action if the principal does not repay the surety as agreed.
How Much Does an Idaho Auto Dealer Bond Cost?
The surety establishes the premium rate for each bond based almost entirely on the principal’s creditworthiness as indicated by their personal credit score. The premium rate will reflect the surety’s assessment of the risk involved in paying claims on behalf of the principal.
A bond applicant with good credit will typically pay a premium rate in the range of one to two percent. Lesser credit will result in a higher premium rate.
Our surety bond professionals will get you the Idaho auto dealer bond you need at a competitive rate.