Oregon Auto Dealer Bond

An Oregon auto dealer bond, formally filed on the DMV Surety Bond form, is a surety bond required by Oregon Driver and Motor Vehicle Services before your vehicle dealer certificate can be issued.

It is a financial guarantee that your dealership or vehicle rebuilding business will operate in compliance with Oregon law and deal honestly with customers. If you fail to do so, a harmed customer can make a claim against your bond to recover 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 is a contract between 3 parties:
 

• The Obligee: Oregon Department of Transportation Driver and Motor Vehicle Services
  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.

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 are officially bonded in Oregon. You will receive an email copy of the bond, and you can request a paper copy if necessary.

4. File Your Bond With Oregon DMV

Submit your completed bond as part of your vehicle dealer certificate application. Oregon DMV requires the DMV bond form to be completed by the bonding company and signed by the dealer before filing.

Filing address:

DMV Business Licensing Unit
 1905 Lana Ave NE
 Salem, OR 97314

Oregon requires a surety bond or letter of credit before issuing or renewing a vehicle dealer certificate. The required amount depends on the type of vehicles you deal in.
 

• Vehicle dealers and rebuilders - Most new, used, franchise, wholesale, recreational vehicle, and vehicle rebuilding businesses need a $50,000 Oregon dealer bond.
• Motorcycle, moped, Class I ATV, and snowmobile dealers - Dealers who operate exclusively in these vehicle types, or any combination of them, need a $10,000 bond.
• Dealers with additional locations - Oregon requires a supplemental application for each additional business location using the same business name. The bond and business details should match the dealer application and any supplemental locations.
• Businesses acting as vehicle dealers - Oregon treats buying, selling, brokering, trading, exchanging, displaying vehicles for sale, or acting as an agent in vehicle sales as dealer activity unless an exemption applies.
• Dealer salespeople - Oregon does not use a separate salesperson bond structure like some other states. The key bond requirement is tied to the dealer or rebuilder certificate.

The bond protects consumers from financial loss caused by dealer fraud, fraudulent representation, or violations of Oregon vehicle code requirements. 
 

• A claim can be filed for violations related to:
• Vehicle registration
• Vehicle permits
• The transfer or alteration of vehicles
•  The regulation of vehicle dealers

The maximum payout is the bond penal sum: $50,000 for most dealer licenses and $10,000 for dealers who only sell motorcycles, mopeds, Class I ATVs, or snowmobiles. 

For the $50,000 bond, claims by people other than retail customers are capped at $10,000. After any valid 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 applicable bond amount
• The dealer or rebuilder is then required to reimburse the surety for any amounts paid out
• Claims on your record will significantly increase your bond premium at renewal

Oregon vehicle dealer certificates are valid for 3 years, but the bond or letter of credit must be purchased and kept current annually by the certificate anniversary date.

Oregon dealer bonds are continuous in form, meaning the bond remains active for the certification period and succeeding certification periods until it is depleted by claims or canceled by the surety. You still need to pay the annual premium to keep the bond active.

If a bond is canceled, Oregon law allows the Department of Transportation to cancel the dealer certificate 45 days after receiving legal notice of cancellation unless the dealer files proof of another bond. Between the notice and proof of a replacement bond, the dealer may not act as a vehicle dealer.

Lance Surety will contact you before renewal so you can avoid a lapse. At renewal, the surety company may review your credit and claim history, so maintaining a strong credit profile can help keep premium costs low.

Getting an Oregon vehicle dealer certificate is a detailed process. Oregon DMV says complete applications can take 2-3 weeks to process, and you cannot conduct dealer business until the application has been approved.

You can find the full application instructions on the Oregon DMV's website.

For a new or renewal vehicle dealer certificate, Oregon generally requires:

• Application for Three Year Vehicle Dealer Certificate (Form 735-370)
• Completed DMV Surety Bond form (Form 735-370B)
• Certificate of liability insurance or an approved insurance exemption
• City or county location approval
• Dealer education certificate from an approved provider or a valid exemption
• Government-issued photo ID copies for all owners, partners, LLC members, or corporate officers
• Supplemental dealer/rebuilder application if you have more than one business location
• Applicable fees

How long does it take to get an Oregon 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, and a paper copy can be mailed if needed. Oregon DMV application processing is separate and can take 2-3 weeks once your full dealer certificate application is submitted.

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

The bond amount is the maximum protection available under the bond, usually $50,000 for Oregon vehicle dealers and $10,000 for dealers that only sell motorcycles, mopeds, Class I ATVs, or snowmobiles. This is not what you pay. The bond premium is the annual cost you pay to purchase the bond, usually a percentage of the bond amount.

What happens if my bond lapses?

If your bond lapses or is canceled, you are no longer in compliance with Oregon dealer licensing requirements. Oregon may cancel the dealer certificate 45 days after receiving notice of bond cancellation unless you provide proof of another bond. You may not act as a vehicle dealer between the notice of cancellation and proof of replacement coverage.

Can my bond be canceled?

Yes. A surety bond can be canceled by the surety company. Oregon law requires notice to the Department of Transportation, and the bond remains a continuing obligation until the applicable cancellation rules are satisfied. If you are closing your dealership or changing bond providers, contact us so the transition is handled properly.

Do motorcycle, moped, ATV, or snowmobile dealers need the same bond amount?

No. If you deal exclusively in motorcycles, mopeds, Class I all-terrain vehicles, snowmobiles, or any combination of those vehicles, Oregon requires a $10,000 bond instead of the standard $50,000 dealer bond. If you sell other vehicle types, the $50,000 requirement applies.

Do I need a separate bond for each dealership location?

Oregon requires a supplemental dealer/rebuilder application for each additional business location under the same business name. The bond should match the dealer application and list additional places of business when applicable. If you add or move locations, check with Oregon DMV and your surety company before conducting business there.