Nebraska 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 Nebraska auto dealer bond needs.
What Are They?
The official name for a Nebraska auto dealer bond is a Nebraska Motor Vehicle, Trailer, Wholesaler, or Motorcycle Dealer Bond. It serves two important purposes:
- It requires licensed motor vehicle dealers to operate in compliance with the laws and regulations governing auto sales in Nebraska.
- It provides a way to compensate anyone with a valid claim for damages due to the dealer’s unlawful or unethical business dealings.
Unlike insurance, it protects the state and the public, not the dealer.
Who Needs Them?
The Nebraska Motor Vehicle Industry Licensing Board (the bond’s “obligee”) requires applicants for licensure as a dealer to purchase a $50,000 Nebraska auto dealer bond. Failing to renew the bond before it expires can result in the dealer (the bond’s “principal”) losing their license to operate a dealership.
Speak with a Surety Bond Professionals agent today to discuss your bonding needs.
How Do They Work?
In addition to the obligee and the principal there is a third party to the legally binding surety bond agreement for a Nebraska auto dealer bond—the bond’s guarantor (the “surety”).
Common reasons for claims being filed against a Nebraska auto dealer bond include failing to remit taxes due on auto sales to the state and defrauding consumers, for example by altering titles, falsifying odometer readings, or misleading customers about the condition of a vehicle. When a claim is filed, the surety will make sure it’s valid before approving it for payment.
The surety bond agreement legally obligates the principal to pay all valid claims. But that rarely means that the principal pays the claimant directly. The normal practice is for the surety, as the guarantor, pays a claim initially, to be reimbursed subsequently by the principal.
What Do They Cost?
The annual premium for a Nebraska auto dealer bond is only a small percentage of the required bond amount. That percentage is called the premium rate, and it is determined by the surety for each bond applicant based in large part on the individual’s personal credit score. The higher the credit score, the lower the risk of the surety not being repaid readily by the principal for claims paid on the principal’s behalf. A low-risk level results in a low premium rate.
The reverse is true as well. A low credit score suggests a high risk level, which results in a high premium rate. Depending on the surety’s risk assessment, a given principal’s premium rate could be as low as one percent, or even less, or as high as three percent.
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Our surety bond professionals will get you the Nebraska auto dealer bond you need at a competitive rate.