Auto dealer surety bonds are required by states to protect consumers, enforce dealership laws, and maintain trust in the automotive marketplace. The bond guarantees that dealers follow regulations related to title transfers, disclosures, sales tax, and ethical business practices. If a dealer violates these rules, harmed parties may file a claim against the bond. Maintaining an active surety bond is essential to keeping a dealer license valid and avoiding fines or suspension.

Auto dealers often switch surety bond providers to lower costs, avoid filing errors, and receive faster, more reliable service. Common reasons include better bond rates, quicker approvals, correct state filing, improved communication, and working with a surety bond specialist instead of a general insurance agent. Changes in credit, business structure, or poor past experiences also prompt dealers to switch.