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 Mississippi car dealer bond needs. Learn how to get a Mississippi car dealer license and contact us today to request a quote on the bond you need.
What Are the Different Types of Mississippi Car Dealer Licenses?
There are three main dealer license types in Mississippi: new car dealer licenses issued by the Mississippi Motor Vehicle Commission (MMVC) and used car dealer and wholesale dealer licenses issued by the Mississippi Department of Revue (DOR). This articles focuses on used car dealer licenses only.
What Are the Steps in the Licensing Process?
Before applying for an initial license as a used car dealer you’ll need to:
- Form a business entity and register it with the IRS to obtain an Employer Identification Number.
- Register the business with the Mississippi Secretary of State and with the DOR to obtain a Mississippi Tax ID number.
- Secure a permanent business location and obtain local zoning approval.
- Attend and pass a dealer education seminar offered by the Mississippi Independent Auto Dealers Association.
- Purchase liability insurance coverage for the vehicles to be sold.
- Purchase a Workers’ Compensation insurance policy if you will have employees.
- Purchase a Mississippi car dealer bond in the amount of $15,000.
Download and complete the license application packet and submit it to DOR, along with all supporting documents and payment of the permit fee (currently $100) and dealer tag fees (currently $43.75 per tag).
Why is a Mississippi Car Dealer Bond Required?
A Mississippi car dealer bond is a type of license and permit bond, and serves as a dealer’s guarantee to comply with all applicable statutes in the Mississippi Administrative Code. The bond obligates the dealer (referred to as the bond’s “principal”) to pay any and all taxes, fees, and fines owed to DOR (the bond’s “obligee”) as well as valid claims for damages incurred by consumers as a result of the dealer’s noncompliance with the law.
How Are Mississippi Car Dealer Bond Claims Paid?
The third party to the legally binding surety bond agreement (in addition to the obligee and the principal) is the surety”—the company guaranteeing the bond. While the principal is legally obligated to pay claims, the surety guarantees that claims will be paid. So the usual practice is for the surety to investigate each claim to ensure its validity and then go ahead and pay it initially, on behalf of the principal. The principal’s legal obligation then becomes repaying the resulting debt to the surety.
How Much Does a Mississippi Car Dealer Bond Cost?
Mississippi car dealer bonds are sold based on an annual premium. The premium is calculated by multiplying the $15,000 bond amount by a premium rate that the surety establishes for each bond based largely on the principal’s personal credit score. The principal’s creditworthiness is the surety’s main concern because of the risk of not being repaid for claims paid on the principal’s behalf.
A principal with a high credit score presents a low risk to the surety and will most likely be assigned a premium rate in the range of one to three percent, for an annual premium of $150 to $300. A principal with lesser credit will, of course, be assigned a higher premium rate.
Our surety bond professionals will get you the Mississippi car dealer bond you need at a competitive rate.