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 New Hampshire car dealer bond needs.
Learn how to get a New Hampshire car dealer license and contact us today to request a quote on the bond you need.
What Are the Different Types of New Hampshire Car Dealer Licenses?
The New Hampshire Department of Safety, Division of Motor Vehicles (DMV) issues licenses to New Hampshire retail vehicle dealers, motorcycle dealers, wholesalers, vehicle transporters, automotive recyclers, repairers, and utility dealers selling trailers, tractors, farm and construction equipment, manufactured homes, and modular buildings.
Our focus here is on obtaining a license as a motor vehicle dealer offering cars for sale to the public.
What Are the Steps in the Licensing Process?
The same application is used for all types of New Hampshire dealer licenses. In order to fill it out completely you’ll need to:
Form a legal business entity and register it with the IRS and the New Hampshire Secretary of State
- Establish a permanent location for your dealership that meets state requirements and obtain local occupancy approval
- Unless you will have our own repair facility, enter into a service agreement with a garage in the area
- Purchase liability insurance on the vehicles in your inventory
- Obtain Workers’ Compensation insurance, if applicable
- Buy a $25,000 New Hampshire car dealer bond
- Undergo a New Hampshire background check, which currently costs $25, and one from your home state if you reside outside of New Hampshire
When you have completed the application and acquired the necessary supporting documents, submit them all, along with payment for the license fee (currently $125) to DMV in Concord. Once your application has been approved, you’ll need to attend a class on New Hampshire laws governing vehicle sales before your dealer plates will be issued.
Why is a New Hampshire Car Dealer Bond Required?
Without a car dealer bond, you won’t be able to get licensed as a New Hampshire dealer. And if you don’t renew it when it expires, so that there is always an active bond in force, you will be required to surrender your dealer license.
There are good reasons for this bonding requirement. The bond serves as a dealer’s guarantee to operate in complete compliance with all applicable New Hampshire laws and regulations regarding vehicle sales. It also obligates the dealer (referred to as the bond’s “principal”) to compensate the state (the “obligee” requiring the bond) or any consumer for financial losses caused by the dealer’s unlawful or unethical actions, such as failing to pay taxes owed to the state or misrepresenting the condition of a vehicle sold to a consumer.
How Are New Hampshire Car Dealer Bond Claims Paid?
The surety bond agreement for a New Hampshire car dealer bond is a legally binding contract between the bond’s obligee, its principal, and the “surety”— the company guaranteeing the payment of claims by the principal. Unless the principal immediately pays a claim determined by the surety to be valid, the surety will pay it on behalf of the principal. However, the legal obligation to pay claims belongs solely to the principal, so the principal must subsequently repay the debt to the surety that was created by the surety’s initial payment of a claim.
How Much Does a New Hampshire Car Dealer Bond Cost?
The annual premium for a New Hampshire car dealer bond must be paid up front, at the time the bond is purchased. That premium is only a small percentage of the required $25,000 bond amount (known as the bond’s “penal sum”), which is the maximum payment for any single claim against the bond. The surety will determine what that percentage (the premium rate) will be based largely on the principal’s personal credit score.
The surety’s main concern is being repaid for claims paid on behalf of the principal, so setting the premium rate is essentially an exercise in risk management. The more creditworthy the principal, the lower the risk to the surety and, consequently, the lower the premium rate. With good credit, your premium rate for a New Hampshire car dealer bond should be in the 1% to 3% range, for an annual premium of $250 to $750.
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Our surety bond professionals will get you the New Hampshire car dealer bond you need at a competitive rate.