Pennsylvania Auto Dealer Bond

A Pennsylvania auto dealer bond, formally called a Manufacturer/Dealer bond on the state bond form, is a surety bond required for vehicle manufacturers and dealers as part of the Pennsylvania dealer licensing and registration process. The Pennsylvania State Board of Vehicle Manufacturers, Dealers, and Salespersons regulates vehicle dealers and salespersons, while PennDOT uses Form MV-375 for the required bond.

It is a financial guarantee that your dealership will follow Pennsylvania law and comply with the rules governing vehicle dealer business activity. If you fail to do so, the bond can provide financial protection up to the required bond amount.

Unlike insurance, which protects you, a surety bond primarily protects the Commonwealth and eligible claimants. 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: Commonwealth of Pennsylvania / PennDOT Bureau of Motor Vehicles. The state authority that requires the bond as a condition of operating. It sets the bond amount and terms for each license or authorisation 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 covered 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 Pennsylvania. You will receive an email copy of the bond, and you can request a paper copy if necessary.

4. File Your Bond With PennDOT

Submit the original MV-375 bond form as part of your Pennsylvania dealer requirements. Follow PennDOT’s latest filing instructions for your application packet.

Filing address shown on Form MV-375:

Bureau of Motor Vehicles
 Regulated Client Services
 PO Box 68283
 Harrisburg, PA 17106-8283

Pennsylvania uses Form MV-375 for several vehicle business and agent bond types. The required amount depends on the authorisation or business type. 

• Manufacturers and vehicle dealers - A $20,000 bond is required for each place of business. 
• Full agents - A $30,000 bond is required for each approved issuing agent service. This may apply if your dealership also handles registration plate or issuing agent services. 
• Messenger services - A $50,000 bond is required, plus an additional $50,000 for each branch office. 
• Salvors - A $10,000 bond is required for each place of business.
• Card agents - A $3,000 bond is required.
• Branch locations - The required bond amount must be maintained for each place of business or branch office when Pennsylvania rules require it.

Who Is Exempt From the Bond?

Not every dealer or manufacturer has to post the bond. Under 75 Pa.C.S. § 1335(a.2), three categories are exempt from the $20,000 bond requirement:

Farm equipment dealers Mobile home dealers and manufacturers Modular housing manufacturers

PennDOT's instructions on Form MV-349 confirm this, noting that the bond does not apply to mobile home dealers who are requesting Dealer Identification Numbers only.

Separately, if you already have a bond on file with the Commonwealth in the Commonwealth's name, in an amount and coverage at least equal to what § 1335 requires, you are not required to file a second bond for your dealer plates.

The bond protects the Commonwealth and eligible claimants from covered monetary loss. Form MV-375 conditions the obligation on two things: complying with the laws and regulations governing the conduct of your business, and not causing monetary loss to the Commonwealth in connection with the business, limited to fees, sales tax, and monetary penalties.

That scope is narrower than a general consumer-protection dealer bond. Private claims are limited to transactions entered into with you in your official capacity as authorized by the Commonwealth. A claim can be tied to issues such as:

Failing to remit required fees, sales tax, or monetary penalties owed to the Commonwealth Violating the laws or regulations governing dealer, manufacturer, agent, messenger, or salvor activity Submitting an application or check that results in monetary loss to the Commonwealth, such as a dishonored check or a title application received without the required fee or tax Causing covered monetary loss to a person who transacted with you under your Commonwealth authorization

The maximum payout per bond is the bond's penal sum, such as $20,000 for a standard manufacturer/dealer bond. Once the bond limit is exhausted, later claims may be denied for lack of adequate coverage. After any payout, you, as the principal, are liable to reimburse the surety.

How the Claims Process Works?

• A claim is filed with the surety company or reported to PennDOT’s Bureau of Motor Vehicles. 
• The surety notifies the Bureau of Motor Vehicles of the claimant's name, reason for the claim, and claim amount. 
• The surety holds claims for a 90-day period before payment is made. 
• If claims exceed the bond amount, the Commonwealth is paid first, and the remaining funds are distributed to private claimants according to the bond rules.
• The dealer or principal must reimburse the surety for any amounts paid out on a valid claim.

Pennsylvania dealer bonds are continuous in nature, meaning the original bond remains active unless it is canceled or not renewed.

Your Pennsylvania dealer license is renewed on a biennial cycle through the State Board of Vehicle Manufacturers, Dealers, and Salespersons. Your bond must remain active during the full time you are licensed and operating.

Lance Surety will contact you well in advance of your renewal date to help prevent any lapse in coverage. To maintain the bond, you must pay the renewal premium when due.

If a surety cancels or does not renew the bond, Form MV-375 requires written notice to both the principal and the Bureau of Motor Vehicles at least 60 days before the action takes effect, and no cancellation takes effect until 60 days have elapsed from the date PennDOT received that notice. That notice goes to the Manager of the Regulated Client Services Section, Riverfront Office Center, 1st Floor, 1101 S. Front Street, Harrisburg, PA 17104-2516, a different address than the PO Box used for filing.

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

Getting a Pennsylvania auto dealer license is handled through the Pennsylvania State Board of Vehicle Manufacturers, Dealers, and Salespersons. PennDOT also outlines dealer registration plate and bond requirements in its official dealer guidance.

You can find the state’s dealer requirements in PennDOT Publication 459, which instructs applicants to follow Form MV-349, complete the MV-375 bond, obtain a vehicle dealership lot license through the Department of State, and complete other required background and business-location steps.

Key items may include the PALS application, the surety bond form, a criminal history record for each owner, partner, or corporate officer, proof of an established place of business, a deed or lease, zoning or occupancy documentation, and entity formation documents.

If you plan to issue temporary registration plates, review PennDOT Publication 457 for agent service requirements.

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

State Board mailing address:

State Board of Vehicle Manufacturers, Dealers, and Salespersons
P.O. Box 2649
Harrisburg, PA 17105-2649
Phone: (833) 367-2762

How long does it take to get a Pennsylvania 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 Pennsylvania requires an original paper bond for your filing packet, we can 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 available under the bond. For a standard Pennsylvania manufacturer/dealer bond, that amount is $20,000 per place of business. This is not what you pay. The bond premium is your cost to purchase the bond, which is a percentage of the bond amount. For a $20,000 dealer bond, that typically means $200 to $2,000 per year depending on credit and underwriting factors.

What happens if my bond lapses?

If your bond lapses or falls below the required amount, you are no longer in compliance with Pennsylvania bonding requirements. Form MV-375 states that the required bond amount must be maintained at all times, with no exceptions, and that if the amount falls below the required amount, your authorization to operate is void.

Can my bond be cancelled?

Yes. A Pennsylvania dealer bond can be cancelled by the surety, but cancellation does not take effect immediately. The surety must notify the Bureau of Motor Vehicles and the principal at least 60 days before cancellation or nonrenewal takes effect, and no cancellation is effective until 60 days have passed from the date of that notice. If you still need your dealer plates, replace the bond before cancellation becomes effective.

Do I need a bond for every salesperson I employ?

No separate salesperson bond is listed on Pennsylvania Form MV-375. Pennsylvania salespersons are licensed through the State Board, but the dealership must maintain the required dealer or related business bond for the licensed business activity.

Do I need a separate bond for each dealership location?

Generally yes. Form MV-375 and Publication 459 both state that the manufacturer/dealer bond is $20,000 for each place of business. If you operate multiple licensed locations or branch lots, confirm the bond amount required for each location before filing.