Louisiana Auto Dealer Bond

A Louisiana auto dealer bond, formally called a Motor Vehicle Dealer Bond or Used Motor Vehicle Dealer Bond depending on the license type, is a surety bond required before a dealership license can be issued by the Louisiana Motor Vehicle Commission (LMVC) or the Louisiana Used Motor Vehicle Commission (LUMVC).

It is a financial guarantee that your dealership will follow Louisiana law, honor written contracts, and deal honestly with customers. If you fail to do so, a harmed customer or the state may be able to make a claim against your bond to recover losses.

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

Every surety bond is a contract between 3 parties:

• The Obligee: Louisiana Motor Vehicle Commission or Louisiana Used Motor Vehicle Commission. The state authority that requires the bond as a condition of licensing. They set the required 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.

1. Submit Your Bond Application

You can apply for your bond online. Just enter basic information about yourself, your dealership, and the bond type you need. If you have questions, we are happy to help you choose the correct Louisiana dealer bond before you submit your license paperwork.

2. Get a Quote

At Lance Surety Bonds, we want to provide you with the best premium rate possible. For most applicants with strong credit, a quote is ready within minutes. More complex applications may take up to 24 to 48 hours.

3. Purchase Your Bond

Once you receive your quote, you can pay the bond premium and you are officially bonded in Louisiana. You will receive an email copy of the bond, and you can request a paper copy if needed for filing.

4. File Your Bond With the Correct Louisiana Commission

File the bond with the commission that licenses your dealership. New motor vehicle, recreational products, specialty vehicle, broker, and facility licenses are handled by the Louisiana Motor Vehicle Commission. Standalone used motor vehicle dealer licenses are handled by the Louisiana Used Motor Vehicle Commission.

Filing addresses:

Louisiana Motor Vehicle Commission
3017 Kingman Street
Metairie, LA 70006

Louisiana Used Motor Vehicle Commission
3132 Valley Creek Drive
Baton Rouge, LA 70808

RS 32:1254 sets the bond requirements for licensees of the Louisiana Motor Vehicle Commission. RS 32:791, part of Chapter 4-C of Title 32 (RS 32:781–808), sets the bond requirement for used motor vehicle dealers licensed by the Louisiana Used Motor Vehicle Commission. The exact bond you need depends on your license type and licensing authority.

• New motor vehicle and recreational products dealers - A $20,000 bond is required before an LMVC new motor vehicle or recreational products dealer license is issued. One bond covers both categories.
• Used motor vehicle dealers - Standalone used vehicle dealers licensed by the Louisiana Used Motor Vehicle Commission need a $50,000 continuing bond.
• Specialty vehicle dealers - Specialty vehicle dealers licensed by the Louisiana Motor Vehicle Commission need a $20,000 bond.
• Brokers - Brokers licensed by the Louisiana Motor Vehicle Commission need a $20,000 bond. Note that a person acting as a broker in the sale of a used motor vehicle for purposes other than resale is licensed and regulated separately under Chapter 4-B of Title 32.
• Satellite warranty and repair centers - LMVC-licensed satellite warranty and repair centers need a $20,000 bond.
• Used motor vehicle facilities - Used vehicle facilities operated under an LMVC license need a $10,000 bond, including qualifying used facilities tied to a new dealer, lessor, recreational products dealer, or specialty vehicle dealer. If the facility operates from more than one location, a separate $10,000 bond is required for each location.

One exception worth knowing: a licensed LMVC motor vehicle or recreational products dealer does not have to obtain a separate used motor vehicle dealer, motor vehicle lessor, or specialty vehicle dealer license when selling or modifying the vehicles it is franchised and licensed to sell, provided those operations run from the location it is already licensed for.

The bond protects consumers and the state from financial loss caused by dealer fraud, contract violations, or failure to follow Louisiana motor vehicle laws. 

A claim may involve:

• Failure to properly handle taxes, license fees, tags, or certificates of title
• Failure to deliver a certificate of title or remit tax, license, or registration fees
• Misrepresenting a vehicle, violating a written contract, or failing to comply with Louisiana dealer laws
• Restitution, penalties, fines, hearing costs, attorney fees, or court costs that fall within the bond terms

The maximum payout is the bond’s penal sum. After any valid payout, you, as the principal, are responsible for reimbursing the surety company.

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 significantly increase your bond premium at renewal

Louisiana dealer bonds must stay active throughout the license period. In most cases, the bond remains in force until it is canceled, as long as the premium is paid and the bond is properly continued for renewal.

For LMVC licensees, a new bond or proper continuation certificate must be delivered at the beginning of each license period. If the required bond is not maintained, the license can be suspended, and if proof of bond is not provided within 30 days, the license can be revoked.

For LUMVC used motor vehicle dealers, the bond must be maintained throughout licensure. If the bond is canceled and a replacement is not furnished before cancellation, the license may be revoked as of the cancellation date.

Lance Surety will contact you before renewal so you can keep your bond active and avoid a lapse in coverage. Maintaining strong credit can also help keep your renewal premium low.

Getting a Louisiana auto dealer license depends on whether you are applying through the Louisiana Motor Vehicle Commission for new, recreational, specialty, or related license types, or through the Louisiana Used Motor Vehicle Commission for a standalone used dealer license.

Common licensing requirements may include:

• Completed dealer license application
• Required surety bond for your license type
• Liability or garage liability insurance
• Business entity and ownership documents
• Zoning verification and an established place of business
• Business sign and business phone number
• Salesperson application or salesperson license where required
• Educational training seminar registration or completion for used dealer applicants
• Application fees and any required background-check documents

You can review LMVC licensing categories on the LMVC licenses page, and used dealer applicants can review the LUMVC initial dealer packet.

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

How long does it take to get a Louisiana dealer bond?

For many applicants, bonds can be issued the same day, often within minutes of completing the application. More complex applications may require additional underwriting and can take up to 24 to 48 hours. Your bond can be delivered digitally by email, and a paper copy can be mailed if required.

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

The bond amount is the maximum protection available to claimants. For Louisiana dealers, this may be $10,000, $20,000, or $50,000, depending on the license type. The bond premium is what you actually pay to purchase the bond. For example, a $20,000 bond may cost $200 to $600 per year for a well-qualified applicant.

What happens if my bond lapses?

If your Louisiana dealer bond lapses or is canceled, your license may be suspended or revoked. LMVC licensees face immediate suspension when the bond is not maintained, and revocation follows if proof of bond is not provided within 30 days. LUMVC used dealer licenses are revoked as of the cancellation date unless a replacement bond is furnished before cancellation.

Do Louisiana salespersons need a separate bond?

No. Louisiana requires salesperson licensing, and every LUMVC-licensed used motor vehicle dealer must have at least one licensed salesperson per location, but the dealer bond requirements attach to the dealership or licensed facility rather than to individual salespersons. Louisiana does not require a separate salesperson bond the way some other states do. Salesperson licenses do renew annually.

Do I need a separate bond for each dealership location?

For LMVC used motor vehicle facilities, yes. If a facility operates from more than one location, a separate $10,000 bond is required for each location. For LUMVC used motor vehicle dealers, a separate license is required for each location, but the statute requires a single $50,000 continuing bond rather than one per location. If you operate multiple locations, confirm the filing requirement with the correct commission before submitting your application.