Maine Auto Dealer Bond

A Maine auto dealer bond, formally called a Motor Vehicle Dealer Bond, is a surety bond required by the Maine Secretary of State, Bureau of Motor Vehicles, before your dealership license can be issued. The requirement comes from Title 29-A M.R.S. §901, sub-§4, and the state's bond form is MVD-390, Surety Bond for Motor Vehicle Dealer.

It is a financial guarantee that your dealership will operate in compliance with Maine law and deal honestly with customers. If you fail to do so, a harmed customer can make a claim against your bond to recover their losses.

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 bond is a contract between 3 parties:

• The Obligee: Secretary of State, State of Maine / Bureau of Motor Vehicles - The state authority that requires the bond as a condition of licensing. They set the bond amount, prescribe the bond form, and administer dealer licensing through the BMV Dealer Section.
• 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. Enter basic information about yourself and your dealership, and you can usually complete the application in just a few minutes. If you have questions, Lance Surety Bonds can help you through the process.

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

4. File your bond with the Motor Vehicle Bureau

Maine says the dealer surety bond does not need to be submitted until after the business location inspection is completed. Once the BMV is ready for the bond, the completed MVD-390 Surety Bond for Motor Vehicle Dealer form is submitted to the Dealer Section, the BMV instructs applicants to have their agent or surety file it on their behalf, and Lance Surety handles that filing for you.

Mailing address:

Maine Bureau of Motor Vehicles
 Dealer Section
 29 State House Station
 Augusta, ME 04333-0029
 Phone: (207) 624-9000 ext. 52143

The Maine Secretary of State requires most motor vehicle dealers to post a surety bond before receiving a license. The bond amount is based on the dealer's prior-year sales volume. New applicants file a bond based on projected sales.

The Maine dealer bond amount is based on sales volume:

New and used motor vehicle dealers - Dealers who buy vehicles for resale, sell more than five vehicles in any 12-month period, or advertise or display three or more vehicles for sale within a 30-day period must be licensed. Vehicles you have owned and registered for at least six months do not count toward these thresholds.

• Dealers with 0–50 annual sales - A $25,000 bond is required.
• Dealers with 51–100 annual sales - A $50,000 bond is required.
• Dealers with 101–150 annual sales - A $75,000 bond is required.
• Dealers with 151 or more annual sales - A $100,000 bond is required.
• Online used car dealers - A $350,000 bond is required under Maine's online used car dealer license. Maine now licenses used car dealers that sell exclusively online. Public Law 2025, chapter 637 enacted Title 29-A M.R.S. §958, which took effect July 29, 2026 and creates a two-year pilot program administered by the Bureau of Motor Vehicles.

Your bond must also be adequate to cover the number of sales indicated by your dealer plates.

License types that do not require a bond - Maine law excludes equipment and light trailer dealers from the motor vehicle dealer surety bond requirement under Title 29-A, section 901. The BMV's dealer license instructions also state that applicants for a light trailer, equipment, loaner, or transporter license are not required to file a bond.

The bond protects consumers from financial loss caused by dealer fraud, negligence, or failure to comply with Maine dealer laws.

A claim may involve issues such as:

• Selling a vehicle with no title, a fake title, or failing to transfer the title properly
• Misrepresenting a vehicle's condition, accident history, or mileage
• Retaining customer deposits without delivering the vehicle
• Failing to follow Maine motor vehicle dealer laws and rules
• Any other breach of the Maine Motor Vehicle Dealer Law

The maximum payout per bond is the bond's penal sum: $25,000, $50,000, $75,000, or $100,000, depending on your required bond amount. Maine law gives claimants three years from the date of sale to file a claim against the 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
• 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

Maine dealer licenses expire on the last day of the month, one year from issuance, and your bond must remain active alongside your license.

The Secretary of State reviews every licensee annually to confirm the bond is in the correct amount. If your sales volume moves you into a higher tier, you will need to increase your bond, usually through a rider or a replacement bond, before your license can be renewed.

Lance Surety will contact you well in advance of your renewal date to help prevent any lapse in coverage. Failure to maintain the required bond is grounds for immediate suspension of your dealer license.

Maine accepts bonds that run concurrently with the license period as well as continuous bonds. If a continuation certificate is used, it must be executed by the surety and received by the Secretary of State for the bond to remain valid.

A surety may cancel a Maine dealer bond by giving 30 days' written notice by registered or certified mail to the Secretary of State, State of Maine, Motor Vehicle Division.

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

Getting a Maine auto dealer license is a detailed process. The Maine Bureau of Motor Vehicles requires applicants to file a dealer license application, provide business and owner information, submit zoning and location documents, complete a business-location inspection, and maintain the required surety bond and liability insurance.

You can find the full dealer forms and licensing documents on the Maine Bureau of Motor Vehicles website.

For more information on how to get the license, check our guide: Maine auto dealer license

How long does it take to get a Maine 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 the Maine Bureau of Motor Vehicles requires a paper original or continuation certificate, we'll mail it to you.

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. In Maine, this ranges from $25,000 to $100,000 for most dealers based on sales volume, and $350,000 for online used car dealers. 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.

What happens if my bond lapses?

If your bond lapses, you are no longer in compliance with Maine dealer licensing requirements and cannot legally continue operating under that license. Maine law says failure to maintain the required bond is grounds for immediate suspension of the dealer license.

Can my bond be cancelled?

Yes, a surety bond can be cancelled. Maine’s official bond form says the surety may cancel the bond by giving 30 days' written notice by registered or certified mail to the Secretary of State, State of Maine, Motor Vehicle Division. Once your bond is cancelled, your dealer license may no longer be valid unless replacement coverage is filed.

Do I need a bond for every salesperson I employ?

No. Maine does not require a separate salesperson bond like some states do. The dealer bond applies to the licensed dealership, and the required amount is based on the dealer's annual sales volume.

Do I need a separate bond for each dealership location?

Not usually. In Maine, additional locations are added to your existing dealer license as annex or secondary locations rather than licensed separately, and the bond is filed against that license. What does change is the amount: because your bond tier is set by total sales volume, adding locations can push you into a higher bond bracket. Contact us if you operate multiple locations — we can make sure your bond amount matches your combined sales.