Auto dealer bond: how much your state requires and what it costs
Choose the state and the dealer type: the bond the DMV or dealer board requires appears with its statute, and the premium range for your credit score.
Auto dealer bond premium in Texas
$375 to $750
estimated, per year, for a $50,000 bond
| Bond the state requires | $50,000 |
| Which amount | Tex. Transp. Code § 503.033 (HB 3533, 2021) |
| Rate for credit 700 or higher | 0.75 % to 1.5 % a year |
| Term | 1 year, renewed yearly |
Estimate from published rate grids, not a quote. Tex. Transp. Code § 503.033 (HB 3533, 2021). Amount read on the official page, October 22, 2026.
Compiled by Radif Partners · Method and sources · rules read October 22, 2026
A motor vehicle dealer bond protects car buyers and the state if a dealer fails to transfer titles, pay off trade-in liens, remit taxes or honor a sale. Every state read for this page requires one of used car dealers, and the amount is set in the statute. Across the 9 states read, the median is $50,000: $20,000 for small New York used dealers, $25,000 in Florida, $35,000 in Georgia, $50,000 in Texas, California, Illinois, North Carolina and Virginia, and up to $50,000 for New York used dealers that sold more than 50 vehicles the year before. On published dealer grids, a $50,000 bond costs about $375 to $750 a year with a credit score of 700 or more, $1,250 to $2,500 between 600 and 649, and $3,750 to $5,000 under 550.
Why dealers are bonded
A car sale moves money and paper that the buyer cannot check on the spot: the title, the payoff of a trade-in loan, the sales tax and registration fees the dealer collects for the state. When a dealer closes without completing those steps, buyers are left with cars they cannot register and loans they did not know were still open. The dealer bond gives them, and the state, someone to claim against. The surety pays valid claims up to the bond amount and then recovers the money from the dealer and its owners.
Claims are not rare, which is why sureties underwrite dealer bonds carefully and why dealer rates rise faster than other license bond rates as credit weakens.
The amounts in the states read
Most states set one amount per license. California requires $50,000 on DMV form OL 25, and a cash deposit can replace it. Texas has required $50,000 of independent dealers since September 1, 2021, when House Bill 3533 doubled the earlier $25,000; franchised dealers are exempt. Florida asks $25,000 on its own form, Georgia $35,000 for each used dealer location, Illinois $50,000 per location, and Virginia $50,000 for the first three years of operation only.
Some states vary the amount. New York grades it by dealer type and volume: $20,000 for used or wholesale dealers with 50 or fewer sales last year, $50,000 for franchised new car dealers, and $100,000 for used dealers above 50 sales. North Carolina asks $50,000 for the first established salesroom and $25,000 more for each additional one. Washington sets $30,000 for motor vehicle dealers and $5,000 for miscellaneous dealers, per business location.
Dealer bond amounts and premiums, state by state
Motor vehicle dealer bond: median required amount
$50,000
| States verified | 9 |
| Lowest | $20,000 |
| Highest | $50,000 |
| Premium basis | credit 650 to 699, per year |
What a dealer bond costs
The premium is a yearly rate on the bond amount, priced on the personal credit of the owners. The envelope of published dealer grids gives 0.75 to 1.5 percent a year with a score of 700 or more, so $375 to $750 for a $50,000 bond. Between 550 and 599 it reaches 5 to 7.5 percent, $2,500 to $3,750. A new dealer with no history in the trade usually pays more than an established one with the same score.
Your dealer bond premium
Auto dealer bond premium in Florida
$625 to $1,250
| Bond the state requires | $25,000 |
| Which amount | Fla. Stat. § 320.27(10) |
| Rate for credit 600 to 649 | 2.5 % to 5 % a year |
| Term | 1 year, renewed yearly |
Term, filing and locations
The bond follows the license. Texas dealer licenses and bonds run two years; Florida's one year; Georgia's expire on September 30 of even years. Several states, Georgia, Illinois and Washington among them, require a separate bond for each licensed location, so a dealer with three lots buys three bonds. Each state prints its own form, and the bond must use its exact wording. A letter of credit or cash deposit is accepted in some states, California and Florida among them, but it ties up the full amount instead of a premium.
Who does not need one
Exemptions vary. Texas exempts franchised dealers and trailer-only licenses. California lets wholesale-only dealers selling fewer than 25 vehicles a year claim an exemption. New York exempts dealers of trailers, motorcycles, heavy vehicles, boats and snowmobiles. Virginia's requirement ends after three consecutive years of operation, and claims above the bond go to its recovery fund. Check the state page before buying.
New dealers and the first bond
A first dealer bond is often the hardest to place. The surety sees no track record, a new business without financial statements, and an owner whose personal credit carries the whole file. Expect questions about experience in car sales, the source of the money for inventory, and any past licenses held in another state. Owners with scores above 700 and some years in the trade usually get standard rates; others may be offered a higher rate for the first term and a re-rate at renewal once the dealership shows a clean year. A dealer who already holds a bond in one state and opens a lot in another usually finds the second bond easier to place, with the same surety.
When a claim arrives
Most dealer bond claims come from buyers who never received a title, or lenders whose trade-in payoff was not sent. The surety sends the claim to the dealer and asks for documents. Fixing the problem quickly, by completing the transfer or paying the lien, usually closes the claim without payment. A paid claim must be reimbursed and will weigh on the renewal price.
Motor vehicle dealer bond: the 9 states read on an official page
| State | Bond required | Previous amount | Rule | Source |
|---|---|---|---|---|
| California | Retail or wholesale dealer: $50,000 Wholesale-only, under 25 vehicles a year (exemption): $0 | Cal. Veh. Code § 11710 | read | |
| Florida | $25,000 | Fla. Stat. § 320.27(10) | read | |
| Georgia | $35,000 | O.C.G.A. § 43-47-8(h); Ga. Comp. R. & Regs. 681-3-.01 | read | |
| Illinois | $50,000 | 625 ILCS 5/5-101 and 5/5-102 | read | |
| New York | Used or wholesale dealer, 50 or fewer sales last year: $20,000 Franchised new car dealer: $50,000 Used or wholesale dealer, more than 50 sales last year: $100,000 | N.Y. Veh. & Traf. Law § 415(6-b) | read | |
| North Carolina | First established salesroom: $50,000 Each additional salesroom: $25,000 | N.C.G.S. § 20-288(e) | read | |
| Texas | $50,000 | $25,000 | Tex. Transp. Code § 503.033 (HB 3533, 2021) | read |
| Virginia | $50,000 | Va. Code § 46.2-1527.2 | read | |
| Washington | Motor vehicle dealer: $30,000 Miscellaneous vehicle dealer: $5,000 | RCW 46.70.070 | read |