Mississippi Auto Dealer Bond

A Mississippi auto dealer bond is a surety bond required before many motor vehicle dealers can receive or maintain a license in the state.

For new motor vehicle dealers, the bond is filed with the Mississippi Motor Vehicle Commission. For used and wholesale motor vehicle dealers, the required bond is the Mississippi Department of Revenue’s Bond of Designated Agent for Motor Vehicle Dealers.

It is a financial guarantee that your dealership will follow Mississippi law, handle vehicle sales and title duties properly, and deal honestly with customers and the state. If you fail to do so, an injured customer or party may be able to make a claim against your bond.

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

Every surety bond is a contract between 3 parties:
 

• The Obligee: Mississippi Motor Vehicle Commission or Mississippi Department of Revenue
  The state authority that requires the bond as a condition of licensing. The correct obligee depends on your license type.
   
• 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 strong credit, a quote is ready quickly. 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 Mississippi. You’ll receive an email copy of the bond, and you can request a paper copy if necessary.

4. File Your Bond With the Proper Mississippi Authority 

Where you file your bond depends on your Mississippi dealer license type.

New motor vehicle dealers file with:

Mississippi Motor Vehicle Commission

1755 Lelia Drive, Suite 200

Jackson, MS 39216

Used and wholesale motor vehicle dealers file their dealer permit documents with:

Mississippi Department of Revenue

Motor Vehicle Licensing Bureau

P.O. Box 1140

Jackson, MS 39215

Mississippi has different bond requirements depending on the type of dealer license.
 

• New motor vehicle dealers - New vehicle dealers are regulated by the Mississippi Motor Vehicle Commission and must file a $25,000 Bond of New Motor Vehicle Dealer for one location.
• Multiple-location new motor vehicle dealers - New dealers with multiple licensed locations may file a $100,000 blanket bond covering all licensed locations of the same capacity instead of separate $25,000 bonds.
• Used motor vehicle dealers - Used motor vehicle dealers are regulated by the Mississippi Department of Revenue and must file a $15,000 Bond of Designated Agent for Motor Vehicle Dealers.
• Wholesale motor vehicle dealers - Wholesale-only dealers are also regulated by the Mississippi Department of Revenue and must file a $15,000 Bond of Designated Agent. Wholesale-only dealers may sell only to other licensed motor vehicle dealers, not to individual retail customers.
• Dismantler-only applicants - If you are applying only as a dismantler and will not sell motor vehicles or manufactured homes, the Department of Revenue may waive the Designated Agent Bond requirement.

The bond protects consumers and the state from financial loss caused by dealer misconduct, failure to follow Mississippi motor vehicle laws, or failure to properly perform required dealer or designated agent duties.

A claim may involve issues such as:
 

• Failing to comply with Mississippi motor vehicle dealer laws
• Failing to properly handle title duties
• Misrepresenting a vehicle or transaction
• Failing to honor written contracts related to the sale or exchange of a motor vehicle
• Other actions that may support suspension or revocation of a dealer license

For new motor vehicle dealer bonds, the Mississippi Motor Vehicle Commission states that the bond is for the benefit of aggrieved parties and that payment is made after the commission receives a final judgment from a Mississippi court.

For Designated Agent Bonds, the bond guarantees that the dealer will faithfully perform the duties of a designated agent.

The maximum payout is limited to the bond’s penal sum, such as $25,000, $100,000, or $15,000 depending on the bond type. After any payout, you as the principal are liable to reimburse the surety.

How the Claims Process Works?

• A consumer, state agency, or claimant contacts the surety company or follows the required state process to file a claim
• The surety investigates the claim to determine whether it is valid
• 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 amount paid out
• Claims on your record can significantly increase your bond premium at renewal

Your Mississippi dealer bond must remain active for your license or permit to stay compliant.

For new motor vehicle dealers, renewals are handled through the Mississippi Motor Vehicle Commission online portal. During renewal, dealers are instructed to review the Bond tab and make sure their bond information is up to date.

For used and wholesale dealers, your bond must remain active with the Mississippi Department of Revenue as part of your dealer permit compliance.

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

Getting a Mississippi auto dealer license depends on whether you are applying as a new, used, or wholesale dealer.

New motor vehicle dealers apply through the Mississippi Motor Vehicle Commission. The MMVC’s initial dealer application is for new dealers only, including new motor vehicle, motorcycle/scooter, specialty vehicle, bus, and RV dealerships. New dealers must also provide a franchise agreement for each make they sell.

Used and auction licenses are handled through the Mississippi Department of Revenue. To apply for a Motor Vehicle Dealer Permit, you must complete the dealer packet and include the required documents.

Used and wholesale dealer applicants generally need to provide:

• A completed Motor Vehicle Dealer Permit application
• A $15,000 Bond of Designated Agent
• Certificate of completion for the 8-hour MIADA educational seminar
• Proof of motor vehicle liability insurance
• Sales tax number for each dealer location
• Required affidavits, forms, and payment

Wholesale-only dealers must meet the applicable dealer requirements but may sell only to other licensed dealers.

For more information on how to get licensed, check our guide: Mississippi dealer license.

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

For most applicants, bonds are issued the same day, often shortly after the application is completed. Your bond can be delivered digitally by email, and a paper copy can be mailed if the state agency requires an original.

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

The bond amount is the maximum protection available under the bond. For Mississippi dealers, common bond amounts are $25,000, $100,000, and $15,000 depending on the license type. This is not what you pay. The bond premium is the annual cost you pay to purchase the bond, usually a small percentage of the bond amount.

What happens if my bond lapses?

If your bond lapses, your dealer license or permit may no longer be compliant with Mississippi requirements. You should renew your bond before it expires to avoid problems with your license, renewal, or ability to operate legally.

Can my bond be cancelled?

Yes. A surety bond can be cancelled by the surety company according to the bond terms. The Mississippi Department of Revenue’s Designated Agent Bond form allows cancellation after 30 days’ written notice to the Department. If your bond is cancelled and not replaced, your dealer permit may no longer be compliant.

Do I need a separate bond for each dealership location?

For new motor vehicle dealers, Mississippi requires a $25,000 bond for one location. Dealers with multiple licensed locations may choose a $100,000 blanket bond covering all licensed locations of the same capacity instead of separate bonds. Used and wholesale dealers should confirm location-specific filing requirements with the Mississippi Department of Revenue.

Are used and wholesale dealer bonds the same in Mississippi?

Used and wholesale motor vehicle dealers generally file the $15,000 Bond of Designated Agent for Motor Vehicle Dealers with the Mississippi Department of Revenue. Wholesale-only dealers have additional restrictions, including selling only to other licensed motor vehicle dealers.