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 car dealer bond needs. Learn how to get a Nebraska car dealer license and contact us today to request a quote on the bond you need.
What Are the Different Types of Nebraska Dealer Licenses?
In Nebraska, every motor vehicle dealer license is either an enfranchised (new) vehicle dealer license or a used vehicle dealer license.
What Are the Steps in the Licensing Process?
The Nebraska Motor Vehicle Industry Licensing Board issues motor vehicle dealer licenses. Before submitting an application to the board, you must:
- Establish a business entity and register it with the state to obtain a tax ID number
- Secure a permanent location for your dealership and get local zoning approval
- Purchasing liability insurance for vehicles in your inventory
- Obtain Workers’ Compensation insurance if you will have employees
- Purchase a $50,000 Nebraska car dealer bond
Submit your completed application and supporting documents to the Board in Lincoln, and wait to be contacted about arranging an inspection of your business location. Payment of the license fee (currently $400) is due only after your dealership has passed inspection and your license has been approved.
Why Is a Nebraska Car Dealer Bond Required?
A Nebraska car dealer bond is a guarantee by the dealer (the bond’s “principal”) to comply with all laws governing Nebraska’s auto sales industry, including paying all taxes and fees due to the state. The bond protects both the state (the “obligee” requiring the bond) and the public against financial harm resulting from the dealer’s failure to live up to that guarantee. Violations of the terms of the bond give injured parties the right to file claims against the bond and be compensated for their loss.
How Are Nebraska Car Dealer Bond Claims Paid?
A Nebraska car dealer bond forms a legally binding contract between the bond’s obligee, its principal, and its surety—the company that guarantees the payment of claims. The principal bears sole legal responsibility for paying claims, but the surety, having guaranteed payment, will pay a valid claim initially and then be reimbursed by the principal. If the principal fails to repay that debt, the surety can take legal action.
How Much Does a Nebraska Car Dealer Bond Cost?
When you purchase a Nebraska car dealer bond, you’ll pay an annual premium that’s a small percentage of the required bond amount. That percentage, the bond’s premium rate, is set by the surety for each bond, based largely on the principal’s personal credit score. That’s the best measure of the risk the surety is accepting in agreeing to pay claims on behalf of the principal and wait for repayment.
A very creditworthy principal could be assigned a premium rate that is as low as one percent, making the annual premium $500. A principal with lesser credit will pay a substantially higher premium.
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Our surety bond professionals will get you the Nebraska car dealer bond you need at a competitive rate.