Connecticut Motor Vehicle / Auto Dealer Bond Cost

While $60,000 might seem like a large amount to pay, in reality, you only need to pay a percentage of it to get bonded, which is called the bond annual premium. The surety company will look at several factors to determine your Connecticut motor vehicle dealer bond cost, most importantly, your credit score. Factors such as years licensed and years of industry experience will also play a factor in your dealer bond cost.

• If your credit score is above 650, you’ll likely have to pay between .75% and 2% of the bond amount.

• For applicants with credit scores between 600 and 649, the rates range between 2.5% and 4%.

Connecticut Motor Vehicle / Auto Dealer License and Renewal

Who Needs a Connecticut Motor Vehicle Dealer or Business Bond?

The Connecticut DMV requires different businesses to carry a surety bond depending on the type of license you apply for:

• Motor Vehicle Dealer Bond – $60,000 bond required

• General Repairer or Recycler Bond – $25,000 bond required

• Limited Repairer Bond – $10,000 bond required

• Leasing or Renting Company Bond – $15,000 bond required

What Is a Connecticut Auto Dealer Bond?

A Motor Vehicle Dealer Bond is a type of surety bond required by the Connecticut Department of Motor Vehicles (DMV). It ensures that dealers comply with all applicable laws and protects consumers from fraudulent or unethical business practices.

This is not insurance for you—it's protection for your customers and the State of Connecticut. However, you're the one responsible for obtaining the bond as part of your dealer license application.

How to Get Your Connecticut Dealer Bond

At All American Bonds and Insurance, we make the process fast and hassle-free:

1. Apply Online – Complete our simple bond application at quickerbonds.com.

2. Get a Quote – We’ll shop the nation’s top surety carriers to secure you the lowest rate.

3. Bond Filing – Once issued, we’ll provide the official bond form (K-158) to file with the Connecticut DMV.

How to Apply for a Connecticut Motor Vehicle Dealer License

To be licensed as a dealer or wholesaler in Connecticut, applicants must complete the following:

Step 1: Determine the License Type You Need

The Connecticut DMV issues several types of licenses, including:

• New or Used Motor Vehicle Dealer

• General Repairer or Limited Repairer

• Recycler

• Leasing or Renting Company

Each license type has specific requirements for bonding, insurance, and compliance.

Step 2: Secure a Place of Business

• You must have an established business location that meets zoning requirements and DMV regulations.

• The DMV will conduct an on-site inspection to verify compliance before issuing a license.

Step 3: Obtain a Surety Bond

• $60,000 for Motor Vehicle Dealers

• $25,000 for General Repairers or Recyclers

• $10,000 for Limited Repairers

• $15,000 for Leasing/Renting Companies

The bond guarantees compliance with state and federal laws and protects consumers from financial loss.

Step 4: Get Liability Insurance

You must maintain a continuous liability insurance policy for your dealership operations. Coverage must include:

• General liability

• Garage liability (for sales, repairs, and service)

• Business auto insurance (as appropriate)

Step 5: Complete the DMV Application

• Fill out the Application for Motor Vehicle Dealer or Repairer License (Form K-7)

• Provide all required documentation, including:
  Business entity paperwork (LLC, corporation, or sole proprietorship documents)
  Zoning approval letter
  Surety bond (Form K-158)
  Liability insurance certificate
  Personal history/background information

Step 6: Pay the Fees

Application fees vary by license type. You’ll also pay plate and registration fees if applicable.

Step 7: DMV Inspection and Approval

• The Dealers & Repairers Licensing Unit will inspect your business location.

• If approved, the DMV will issue your Connecticut Motor Vehicle Dealer License and dealer plates.

Required Continuous Liability Insurance Coverage for Connecticut Auto Dealers

In addition to your surety bond, every licensed motor vehicle dealer in Connecticut must maintain a continuous liability insurance policy. This requirement is enforced by the Connecticut DMV as part of the dealer licensing process. Failing to maintain insurance can result in suspension or revocation of your dealer license and dealer plates.

Here’s what you need to know about required coverages:

🔹 General Liability Insurance

• Covers accidents or injuries that happen on your business premises (for example, a customer slips and falls in your showroom).

• Protects against claims of bodily injury, property damage, and personal injury caused by your dealership’s operations.

• Often required by landlords if you lease your business location.

🔹 Garage Liability Insurance

• Specifically designed for auto dealerships, repair shops, and service operations.

• Covers liability from vehicle sales, test drives, repairs, and maintenance work performed at your dealership.

• Provides protection if a customer’s vehicle is damaged while in your care or if an employee causes an accident while operating a customer’s car.

🔹 Business Auto Insurance

• Covers vehicles owned by the dealership (such as demo cars, service vehicles, or transport trucks).

• Includes liability coverage for accidents caused while driving dealership-owned vehicles.

• May also cover medical payments, uninsured motorists, and physical damage depending on the policy.

Why It Matters

Maintaining the proper insurance not only keeps you compliant with Connecticut law, but it also:

• Protects your business assets from costly lawsuits.

• Builds trust with customers by ensuring they are financially protected.

• Keeps your dealership operating legally without risk of license suspension.

Need Help with Continuous Liability Insurance?

At All American Bonds and Insurance, we specialize in insuring licensed auto and powersports dealers in Connecticut. Whether you're starting your first dealership or expanding operations, we’ll help you choose the right protection at a competitive rate.

✅ Fast quotes
✅ Low down payments
✅ Coverage that meets dealer board and lender requirements

📞 Call us at (844) 321-2663 or Get a Quote Now!