Motor Vehicle Dealers - Used Vehicles Only

The Class 2 Second Hand Motor Vehicle Dealer Bond is a surety bond required for businesses that deal exclusively in used motor vehicles in Massachusetts. This bond is mandated by individual cities and towns throughout the state as part of the licensing requirements for second hand motor vehicle dealers.

Who Needs This Bond: Class 2 second hand motor vehicle dealers operating in Massachusetts municipalities must obtain this bond. These are businesses that buy, sell, or exchange used motor vehicles only, as distinguished from new vehicle dealers or those dealing in both new and used vehicles.

Protection and Purpose: The bond protects consumers and the issuing municipality from financial losses resulting from the dealer's failure to comply with local regulations, fraudulent business practices, or violations of consumer protection laws. It ensures that customers have recourse if they suffer financial harm due to the dealer's misconduct or failure to fulfill contractual obligations.

Bond Details: The bond amount is set at $25,000 and has a one-year term. The specific obligee (the city or town requiring the bond) must be designated when the bond is issued, as requirements vary by municipality. This bond is renewable annually to maintain continuous compliance with local licensing requirements.