District of Columbia Auto Dealer Bond

A District of Columbia auto dealer bond, formally called a Motor Vehicle Dealer Bond, is a surety bond required for a DLCP Vehicular Services License (Motor Vehicle Dealer) before your dealership license can be issued.

The bond is a financial guarantee that your dealership will follow District of Columbia laws and regulations. D.C. Code § 50-603 requires licensed motor vehicle dealers to maintain a corporate surety bond of at least $25,000.

Unlike insurance, which protects you, a surety bond primarily protects consumers and the District. If a valid claim is paid out, you are responsible for reimbursing the surety company.

Every surety is a contract between 3 parties:
 

• The Obligee: District of Columbia Department of Licensing and Consumer Protection (DLCP)
  The District authority that requires the bond as a condition of licensing. They set the bond amount, form, and filing requirements.
   
• The Principal: You, the dealer
  You purchase the bond and are bound by its terms. If a valid claim is paid, you must reimburse the surety.
   
• The Surety: such as Lance Surety Bonds
  We underwrite the bond and guarantee payment to claimants up to the bond amount if you default on your obligations.

1. Submit Your Bond Application

You can apply for your bond online. Just enter some basic information about yourself and your business, and you should be able to submit your application within a matter of minutes. If you have any questions, we are more than happy to assist you.

2. Get a Quote

At Lance Surety Bonds, we want to provide you with the best premium rate possible. For most applicants with a strong credit history, a quote is ready within minutes. More complex applications may take up to 24 hours.

3. Purchase Your Bond

Once you receive your quote, you can pay the bond premium and you’re officially bonded in the District of Columbia. You’ll receive an email copy of the bond, and you can request a paper copy if necessary.

4. File your bond with DLCP

Submit your bond as part of your dealer license application to the District of Columbia Department of Licensing and Consumer Protection. The DLCP bond form lists the Department’s filing address as:

Filing address:

Department of Licensing and Consumer Protection
1100 4th Street SW, 2nd Floor
Washington, DC 20024

The District of Columbia Department of Licensing and Consumer Protection requires applicants for a Vehicular Services License (Motor Vehicle Dealer) to post a $25,000 Motor Vehicle Dealer Bond before receiving a license.
 

• Motor vehicle dealers - Applicants for a DLCP Vehicular Services License (Motor Vehicle Dealer) must post a $25,000 bond for the required license period.
• Used car lot operators - DLCP lists a separate Used Car Lot Bond requirement of $25,000 for applicants under the Vehicular Services License category.
• New and used vehicle sellers - The Motor Vehicle Dealer Bond applies to the licensed business that buys, sells, or deals in motor vehicles in the District.
• Salesperson designation - DC’s Motor Vehicle Dealer requirements include a Motor Vehicle Salesperson Designation Letter, but the current DLCP requirements page does not list a separate salesperson surety bond for each salesperson.
• Auto repair businesses - Auto repair is listed by DLCP under a separate Consumer Goods (Auto Repair) bond requirement, not the Motor Vehicle Dealer Bond. The amount depends on the number of employees.

The bond protects the District and people who suffer financial loss because a dealer, officer, agent, employee, or other person acting for the dealer violates a law or regulation that applies to the motor vehicle dealer business. 

A claim or action can arise from issues such as:
 

• Selling a vehicle with no title, a defective title, or failing to transfer title properly
• Misrepresenting a vehicle’s condition, accident history, mileage, or legal status
• Retaining customer deposits or payments without delivering the vehicle or required documents
• Failing to follow District rules that apply to the licensed motor vehicle dealer business
• Any other violation that causes a consumer or the District financial harm

The maximum payout per bond is the bond’s penal sum: $25,000 for the Motor Vehicle Dealer Bond. After any payout, you as the principal are liable to reimburse the surety.

How the Claims Process Works?

• Consumer or claimant contacts the surety company directly to file a claim
• The surety investigates the claim to determine its validity
• If the claim is valid, the surety pays the claimant up to the bond’s penal sum ($25,000)
• The dealer (principal) is then required to reimburse the surety for any amounts paid out
• Claims on your record will significantly increase your bond premium at renewal

District of Columbia Motor Vehicle Dealer Bonds are tied to the DLCP license period. DLCP states that the Motor Vehicle Dealer Bond must be posted for the duration of the two-year license period.

The official Motor Vehicle Dealer Bond form also states that the bond covers a license year ending not more than two years from the effective date of the bond. If you choose a longer license option, confirm with DLCP whether additional bond coverage is needed to keep the license active for the full term.

Lance Surety will contact you well in advance of your renewal date to help prevent any lapse in coverage. The safest approach is to renew your bond before the current term ends so your license remains compliant.

At renewal, the surety company will review your credit and claims history. Maintaining a strong credit profile can help keep your premium costs low.

Getting a District of Columbia auto dealer license starts with the DC Business Portal and the DLCP Vehicular Services License category for Motor Vehicle Dealer.

The DLCP Motor Vehicle Dealer requirements page lists the required documents and items, including a Car Order & Bill of Sale sample, Certificate of Occupancy, Certified Letter of Authorization, Corporate Registration if applicable, Motor Vehicle Dealer Bond, Motor Vehicle Salesperson Designation Letter, Police Criminal History Report, and Tax Registration & Clean Hands Certification.

The DLCP fee schedule lists a 2-year Motor Vehicle Dealer license fee of $99 and a 4-year license fee of $198. Licensing requirements can change, so review the DLCP page before submitting your application.

For more information on how to get the license, check the official DLCP Motor Vehicle Dealer requirements page.

How long does it take to get a District of Columbia dealer bond?

For most applicants, bonds are issued the same day, often within minutes of completing the application. Your bond is delivered digitally by email. If DLCP requires an original paper bond form or wet signature, we can help you request the proper copy.

What is the difference between the bond amount and the bond premium?

The bond amount, also called the penal sum, is the maximum protection offered to consumers and the District: $25,000 for the District of Columbia Motor Vehicle Dealer Bond. This is not what you pay. The bond premium is the cost you pay to purchase the bond, which is a percentage of the bond amount.

What happens if my bond lapses?

If your bond lapses, your dealer license may no longer meet DLCP requirements. You should not sell vehicles under a license that is missing required bond coverage. Renewing before the bond term ends helps prevent compliance issues and possible license delays.

Can my bond be cancelled?

Yes, a surety bond can be cancelled by you or by the surety company. If a bond is cancelled, you must replace it or otherwise remain compliant with DLCP requirements to keep your dealer license active. If you are closing your dealership, contact us so the cancellation is handled properly.

Do I need a bond for every salesperson I employ?

The current DLCP Motor Vehicle Dealer requirements list a Motor Vehicle Salesperson Designation Letter, but they do not list a separate salesperson surety bond for each salesperson. If your business structure or license type changes, confirm the latest requirement directly with DLCP.

Do I need a separate bond for each dealership location?

Generally, each licensed business or location must satisfy the bond requirement tied to its DLCP license. If you operate more than one location or business entity, contact us and confirm the required filing structure with DLCP before applying.