Oregon 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 your Oregon auto dealer bond needs.
What Are They?
An Oregon auto dealer bond is classified as a type of license and permit bond. This is because licensure as an auto dealer is conditioned on the purchase of the bond. The bond is the dealer’s guarantee to abide by all applicable state laws and regulations governing the industry.
The bond provides a source of funds for paying damages resulting from the dealer’s unlawful or unethical actions. Claims may be filed by the state for nonpayment of taxes, fees, or penalties or on behalf of a consumer who has lodged a formal complaint and request for damages. Consumers may, of course, file their own claims against an Oregon auto dealer license for losses caused by the dealer’s failure to do the following:
- Provide a valid title for a vehicle.
- Concealing relevant facts about a vehicle, such as prior accident or flood damage.
Who Needs Them?
Anyone applying for a new Oregon auto dealer license or renewing an existing license is required to purchase an auto dealer bond in the amount of $50,000. This is known as the bond’s “penal sum,” which is the most that will be paid out on a claim to a single retail customer.
Some auto dealers buy a three-year Oregon auto dealer bond to match the three-year term of an auto dealer license. However, buying a one-year bond that is renewed or replaced every year will also do the trick. To avoid suspension of an Oregon auto dealer bond, there must always be a valid bond in force.
Speak with a Surety Bond Professionals agent today to discuss your bonding needs.
How Do They Work?
The agreement underlying an Oregon auto dealer bond is a legally binding contract between:
- The Oregon Department of Transportation (the “obligee” requiring the bond).
- The auto dealer (the “principal purchasing the bond”).
- The bonding company underwriting and approving the bond (the “surety”).
The terms of that contract make the principal solely responsible for paying valid claims against the Oregon auto dealer bond. Interestingly, though, the surety usually pays the claimant directly on behalf of the principal and subsequently is repaid by the principal.
What Do They Cost?
The principal pays a premium that is only a small percentage of the Oregon auto dealer bond’s penal sum. The surety determines what that premium rate will be based on the underwriters’ assessment of the risk that extending credit to the principal entails. The primary consideration is the principal’s credit score, but other factors are also taken into account, such as the principal’s personal and business finances, industry experience, and any history of prior claims.
The more creditworthy the principal is, the lower the premium rate—as low as 1% to 2% for someone who qualifies for the standard market rate.
Get a Quote
Our surety bond professionals will get you the Oregon auto dealer bond you need at a competitive rate.