Georgia Auto Dealer Bond

A Georgia auto dealer bond, formally called a used motor vehicle dealer surety bond, is required by the Georgia State Board of Registration of Used Motor Vehicle Dealers and Used Motor Vehicle Parts Dealers before a used motor vehicle dealer license can be issued.

It is a financial guarantee that your dealership will follow Georgia law, honor written contracts and warranties, and handle vehicle titles honestly. If a customer suffers a covered loss because of fraud or another covered violation, the customer may file a claim against your bond.

Unlike insurance, which protects you, a surety bond primarily protects your customers and the state. 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: Georgia State Board of Registration of Used Motor Vehicle Dealers and Used Motor Vehicle Parts Dealers

The state authority that requires the bond as a condition of licensing. They set the bond amount and terms.

• 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.

The cost of a Georgia used motor vehicle dealer bond starts at $350. Bond premiums are typically between 1% and 3% of the bond amount, so between $350 and $1,050 per year for the standard $35,000 dealer bond.

It is important to understand the difference between the bond amount and what you actually pay. The $35,000 is the maximum protection available under the bond. It is not your annual cost. What you pay is the bond premium, which is a small percentage of that amount.

Your premium is quoted individually based on three factors: your personal credit score, your experience in the industry, and any prior bond claims on your record. Because each surety company weighs these factors differently, the same applicant can receive different quotes from different underwriters.

Even applicants with poor credit can get bonded. A lower credit score usually means a higher premium, not an automatic denial.

Here’s a breakdown of the bond requirements and the premium costs based on your credit score.

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 Georgia. You’ll receive an email copy of the bond, and you can request a paper copy if necessary.

4. File your bond with the Auto Industry Division 

Submit the original bond as part of your used motor vehicle dealer license application. Georgia requires the $35,000 bond to be in the exact business name, signed, and submitted with a power of attorney attached.

Filing address:

State Board of Registration of Used Motor Vehicle Dealers
 & Used Motor Vehicle Parts Dealers
 Used Motor Vehicle Dealers Division
 237 Coliseum Drive
 Macon, Georgia 31217

The Georgia State Board requires the following applicants to post a surety bond before receiving or maintaining a license.

• Used motor vehicle dealers - Georgia used motor vehicle dealers must post a $35,000 surety bond. The bond must run with the licensing period and remain active during the full license term.
• Used motor vehicle parts dealers - Used motor vehicle parts dealers need a separate $10,000 bond.
• Each licensed location - Georgia requires a separate bond for each licensed location. If you add another lot or change location, the bond requirement still has to match the licensed business and location.
• Bonded title applicants - A certificate of title bond is different from a dealer license bond. It applies when someone needs a bonded title, and the amount is based on the vehicle value rather than a fixed dealer license amount.

Georgia’s bond requirement lists a $35,000 bond for used motor vehicle dealers and a $10,000 bond for used motor vehicle parts dealers. The state also provides a separate Used Auto Parts Dealer Bond form and a Department of Revenue certificate of title bond form for bonded title cases.

The bond protects buyers from covered losses caused by dealer misconduct. Georgia’s used motor vehicle dealer bond language focuses on losses connected to written contracts or warranties and fraudulent misrepresentation involving liens or titles.

A claim can be filed for any of the following violations:

• Failing to deliver or properly apply for a title after the sale
• Fraudulent misrepresentation about liens against a vehicle
• Fraudulent misrepresentation about the title to a used motor vehicle
• Failing to comply with covered written contracts or warranties
• Other violations covered by the Georgia used motor vehicle dealer law and the bond form

The maximum payout for a Georgia used motor vehicle dealer bond is the bond’s penal sum: $35,000. 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
• The dealer is then required to reimburse the surety for any amounts paid out
• Claims on your record can increase your bond premium at renewal

Georgia motor vehicle dealer licenses are valid for up to two years and expire on September 30 of even-numbered years. Your bond must be renewed alongside your license, so there is no lapse during the licensing period.

Dealer licenses and bonds expire on September 30 of even-numbered years. The renewal period runs through September 30. Late renewals may be accepted from October 1 through October 31 with a late fee.

Renewals submitted on or after November 1 will be invalid, and the license may require reinstatement instead.

Lance Surety will contact you well in advance of your renewal date to help prevent a lapse in coverage. At renewal, the surety company will review your credit. Maintaining a strong credit profile can help keep your premium costs low.

Getting a Georgia used motor vehicle dealer license starts with the Georgia Secretary of State’s website. The Board’s checklist includes a completed, signed and notarized application, zoning certification, surety bond with power of attorney, certificate of insurance, business photos, proof of seminar completion, background check, and preliminary inspection.

The main steps include:

• Complete your used motor vehicle dealer application
• Get the application signed and notarized
• Get zoning approval for your business location
• Obtain the required $35,000 surety bond
• Submit a certificate of insurance
• Provide photos of the business, display area, and signage
• Complete the pre-licensing seminar
• Submit fingerprints and a background check
• Pass the preliminary inspection

For more information on how to get the license, check our guide: Georgia used car dealer license

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. Georgia’s used motor vehicle dealer bond amount is $35,000. This is not what you pay. The bond premium is the annual cost you pay to purchase the bond, which is a percentage of the bond amount. For applicants with good credit, a $35,000 bond often costs $350-$1,050.

What happens if my bond lapses?

If your bond lapses, you are no longer in compliance with Georgia licensing rules. Georgia states that a licensee should not be without a bond during any licensing period. A lapse can place your license at risk and may require reinstatement if the license is not renewed on time.

Can my bond be cancelled?

Yes, a surety bond can be cancelled by you or by the surety company. If your bond is cancelled, you need a replacement bond to stay compliant with Georgia licensing requirements. Contact Lance Surety Bonds before cancelling so the change is handled correctly.

Do I need a bond for every salesperson I employ?

No. Georgia does not list a separate salesperson bond requirement for used motor vehicle dealer employees. The required bond is tied to the licensed used motor vehicle dealer and licensed location.

Do I need a separate bond for each dealership location?

Yes. Georgia’s application instructions state that a separate bond is required for each licensed location. If you operate multiple licensed locations, each location needs its own bond.