Montana Car Dealer License Guide

  • Home
  • Montana Car Dealer License Guide

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 Montana car dealer license bond or Montana auto bond needs. 

Learn how to get a Montana car dealer license and contact us today to request a quote on the bond you need.

What Are the Different Types of Montana Car Dealer Licenses?

The Motor Vehicle Division (MVD) of the Montana Department of Justice issues car dealer licenses for franchise (new vehicle) dealers, used vehicle dealers, wholesale dealers. Auto auction dealers, broker dealers, and new manufactured home dealers. The term “vehicles” encompasses a variety of vehicles including cars, trucks, motorcycles, ATVs, vans, buses, and more. This article focuses on the most common Montana motor vehicle dealer license—used dealer licenses.

What Are the Steps in the Licensing Process?

There are certain things you’ll need to accomplish before you can submit your application for a license to sell used vehicles.

  • Form and register your business with the Montana Secretary of State and obtain a tax ID number.
  • Secure a business location that meets MVD requirements and obtain local zoning approval.
  • Purchase a Montana car dealer bond in the amount of $50,000 ($15,000 if you will be selling only street-legal motorcycles and/or quadricycles or $5,000 if you will sell motorcycles and/or quadricycles that are not street legal). 
  • Purchase Workers’ Compensation insurance if you will have employees.
  • Schedule an inspection of the dealership by a law enforcement officer.

After you have completed the application form in its entirety, submit it along with all required supporting documents and the licensing and dealer plate fees (currently $30 and $35 respectively) to MVD, Title and Registration Bureau in Deer Lodge.

Why is a Montana Car Dealer Bond Required?

A Montana car dealer bond guarantees that the dealer (known as the bond’s “principal”) will operate in full compliance with all Montana statutes governing vehicle sales.  Committing an infraction that causes financial harm to MVD (the “obligee” requiring the bond), such as nonpayment of taxes and fees, or to a consumer, such as falsifying an odometer reading, gives the injured party the right to file a claim against the bond and be compensated by the dealer (the bond’s “principal”). 

Not maintaining an active Montana car dealer bond at all times can lead to suspension or revocation of your dealer license.

How Are Montana Car Dealer Bond Claims Paid?

In addition to the obligee and the principal, there is one other party to the legally binding car dealer bond contract—the “surety,” which is the company guaranteeing payment of claims by the principal.  Although the principal bears full legal responsibility for paying valid claims, because payment is guaranteed by the surety, the surety typically pays them initially and then is repaid by the principal for the resulting debt. 

How Much Does a Montana Car Dealer Bond Cost?

What you will pay for a Montana car dealer bond depends largely on how creditworthy the surety considers you to be. The main underwriting concern is whether you will repay the surety in a timely manner for any claims paid by the surety on your behalf. The risk to the surety is measured by your personal credit score and reflected in the premium rate you will be assigned. 

The better your credit, the less risk there is that the surety will have to take legal action to obtain reimbursement. This means your premium rate will be on the low end of the spectrum, potentially as low as one percent, which would make the annual premium for your $50,000 Montana car dealer bond only $500.

Get A Quote

Our surety bond professionals will get you the Montana car dealer bond you need at a competitive rate.