Motor Vehicle Dealers - New or New and Used Vehicles

The New York Dealer Bond is a surety bond required under New York State Vehicle and Traffic Law Section 415(6-b) for motor vehicle dealers operating in the state. This bond serves as a financial guarantee that dealers will conduct business in accordance with state laws and regulations governing vehicle sales.

Who Needs This Bond: New vehicle dealers and used vehicle dealers in New York must obtain this bond as part of their licensing requirements. The bond amount varies based on the type of dealership: $20,000 for used vehicle dealers, $50,000 for new vehicle dealers, and $100,000 for larger operations.

Protection and Purpose: This bond protects the State of New York and consumers from financial losses resulting from dealer violations of state vehicle and traffic laws. It ensures that dealers fulfill their obligations regarding proper vehicle titles, accurate disclosures, and adherence to consumer protection regulations. If a dealer fails to comply with legal requirements, claims can be made against the bond to compensate affected parties.

Bond Requirements: The bond has a one-year term and is renewable annually. Application requirements vary by bond amount: the $20,000 and $50,000 bonds require a signed application with business and personal indemnity from owners and spouses, plus a clean credit report. The $100,000 bond additionally requires financial statements and principal owners must own real estate.