OKLAHOMA MOTOR VEHICLE DEALER BOND
Oklahoma Motor Vehicle Dealer Bond
Getting a Oklahoma motor vehicle dealer bond is a key step to becoming a licensed car dealer in the state. The motor vehicle dealer bond serves as an extra guarantee that your dealership will follow all rules and regulations that govern motor vehicle dealers in the state of Oklahoma.
Surety Bond Name: Oklahoma Motor Vehicle Dealer Bond
Surety Bond Amount: $25,000
Surety Bond Term: 2 Years
Just like all surety bonds, the Oklahoma motor vehicle dealer bond serves as protection for the general public, and not as insurance for your business. In case you don't follow the rules and your obligations under the bond, a claim can be made against you. If proven to be a legitimate claim, the penal sum of the bond is used to compensate the affected parties. The surety covers the costs of claims up front, which you’ll be required to reimburse in full. This means you should avoided having any claims, as they can cause serious harm to your business and finances.
Oklahoma Motor Vehicle / Auto Dealer Bond Cost
While $25,000 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 Oklahoma 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%.
Oklahoma Used Motor Vehicle / Used Auto Dealer License and Renewal
Who is required to be licensed?
The surety bond requirement applies to all used motor vehicle dealers in the state of Oklahoma. The bond requirement does not apply to Franchised dealers issued Franchised dealer license.
What are the bonding requirements?
Most dealers are required to obtain a $25,000 motor vehicle dealer surety bond, which is like an insurance policy for the dealer’s customers and is the only acceptable form of security. A separate bond is required for each other category that a dealer applies for. The surety bond is required for: Oklahoma Used Motor Vehicle Dealers - 25K Bond, Oklahoma Wholesale Motor Vehicle Dealers - 25k Bond, Oklahoma Motor Vehicle Rebuilders - 15k Bond.
The bond must be valid for the term of the license (2 years). The bond must begin on the first day of every even Numbered year, and expire on the last day of every odd numbered year. (for example, 1/1/2024 through 12/31/2025)
What are the insurance recommendations?
It is required by the state of Oklahoma that all motor vehicle dealers in the state of Oklahoma obtain liability insurance coverage. Some examples include:
The Certificate of Insurance must be completed by your agent on the enclosed UD-7 form, and must reflect the ownership, business name and lot address as it appears on the initial application.
Coverage, in accordance with the financial responsibility laws of the State of Oklahoma, shall be kept in force at all times with no lapse in coverage during the period of licensure. A lapse in coverage will result in automatic revocation of the license.
Secondary lot applicants may submit an amended certificate of insurance adding the secondary lot locations business name and lot address.
Whether applying for your first auto dealer license in Oklahoma, or renewing an existing one, you have to submit a dealer application form, together with all necessary documents that prove you meet the requirements.
When you renew your license, you’ll have to renew your Oklahoma auto dealer bond as well. As your business finances and personal credit score can change, make sure you work on improving those stats, so that you can reduce your surety bond cost over the years.