Utah 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 Utah auto dealer bond needs.


What Are They?

Utah auto dealer bonds play an important role in regulating Utah’s auto trading industry. Each bond is a dealer’s guarantee to do business in full compliance with the statutes governing the conduct of motor vehicle dealers operating in Utah; including employing ethical business practices and remitting required taxes and fees to the state. Any violation that causes financial harm to the public can result in the injured party filing a claim against the bond and being compensated for their loss.


Who Needs Them?

The Utah Motor Vehicle Enforcement Division (MVED) licenses the state’s auto dealers and mandates the purchase of a Utah auto dealer bond as a prerequisite for licensing. The required bond amount differs by license type. A $75,000 bond is required for the most common licenses, which are those for dealers selling new and/or used motor vehicles other than motorcycles.

Utah auto dealer licenses expire on June 30 of each year and must be renewed before that date. The dealer’s bond must also be renewed annually. Not having an active bond in force at all times can result in fines and penalties, including license revocation.

Speak with a Surety Bond Professionals agent today to discuss your bonding needs.


How Do They Work?

Certain terms are used to refer to the three parties to any surety bond agreement. The party requiring the bond, in this case MVED, is referred to as the “obligee.” The dealer purchasing the bond is the “principal.” And the party guaranteeing the bond is known as the “surety.” The agreement legally obligates the principal to pay all valid claims against the bond and indemnifies both the obligee and the surety against any legal responsibility for them.

The bond ensures that funds will be available to compensate those incurring a financial loss due to the principal’s unlawful or unethical business practice. The obligee can recover unpaid taxes and/or fees owed by the principal, and consumers can file claims for losses due to such fraudulent acts as altering a title, tampering with a vehicle’s odometer or falsifying odometer readings, or deliberately misleading a purchaser about the condition of a vehicle. 

Although the legal obligation to pay claims belongs entirely to the principal, the surety has guaranteed the payment of claims and therefore typically will pay a claim initially and then be repaid by the principal. Not repaying the surety can result in the surety taking legal action against the principal to recover the claim amount.


What Do They Cost?

The annual premium for a $75,000 Utah auto dealer bond depends on the premium rate set by the surety, which in turn depends on an underwriting assessment of the risk involved in paying claims on behalf of the principal and waiting for reimbursement. That risk assessment leans heavily on the principal’s personal credit score. 

A principal with good credit presents little risk to the surety and is rewarded with a low premium rate—around one to two percent. Conversely, a low credit score is a red flag signaling a greater risk level, which results in a higher premium rate, possibly as much as three percent or even more.


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Our surety bond professionals will get you the Utah auto dealer bond you need at a competitive rate.