Delaware DMV Bond

Delaware DMV Bond

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A Delaware DMV bond, also known as a Motor Vehicle Dealer bond, is a type of surety bond that is required by the Delaware Division of Motor Vehicles (DMV) for individuals or businesses that want to obtain or renew a motor vehicle dealer license. The bond serves as a form of protection for customers against any fraudulent or unethical practices by the motor vehicle dealer. If a dealer engages in such practices, a customer may file a claim against the bond to seek compensation for any resulting damages. The bond amount required by the DMV may vary based on the type of license and the dealer's history, and the bond must be renewed periodically to maintain the dealer's license.

What is an Delaware Dealer Bond? 

Delaware Car Dealer Bonds are required by The Delaware Department of Motor Vehicles "DMV" to obtain your Dealer license.  The Auto Dealer bond ensures that the principal shall comply with the conditions of any contract made by such licensee in connection with the sale or exchange of any motor vehicle and shall not violate any of the provisions of law relating to the conduct of the business for which it is licensed.

- $25,000 DMV Bond is required for the sale of new and used vehicles

Different parts of a bond:

There are 3 parts to a DMV surety bond. The Principal "YOU", The Surety Company, and the Obligee. The Principal is the business or individual applying for the Auto Surety Bond. The Obligee is the individual or entity requiring the Dealer Bond and the Surety Company is the company who provides the Surety Bond coverage.

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Delaware Dealer Requirements and information :

The DMV bond amount for a auto dealer license in Delaware is $25,000. 

The Delaware Division of Motor Vehicles is mandated by law to license all dealers operating in Delaware. The Division renews dealership license at the same time your dealer tags are renewed. Dealers with no dealer tags must make application for a new dealer license prior to the expiration of the current license. 

Section §6302 -License Requirements:
(c) Resident requirements: The owner of a dealership must have been issued a Delaware driver’s license and established residency in Delaware at least 90 days prior to the time of application. Franchised and New vehicle dealers are exempt from this requirement. As part of the approval process for a Dealer License, section 6312 of Title 21 of the Delaware Code requires that the Division of Motor Vehicles determine whether or not the applicant is of good character and has complied with and will comply with the laws of this state and other states. The Division makes this determination by reviewing each application in its entirety, as well as a criminal background check for each applicant.  Please note that it is incumbent on the applicant to ensure that their application and background meet the standards set forth by the Code. Accordingly, the applicant assumes the risk that their application may not be approved if they fail to meet these standards. There will be no reimbursement for any monies expended in connection with the application process if the application is denied. 
1. All dealership records are to be retained for five (5) years and must be available for inspection during business hours.
2. The Division must be notified immediately of any changes in the business including relocation, telephone numbers, officer/owner names, addresses, etc.
3. A dealer must receive authorization from the Division before issuing a second temporary registration plate to the same vehicle.
4. A dealer must witness proof of valid liability insurance and driver’s license before issuing a temporary registration.
5. Upon issuing a temporary registration, the dealer is required to submit the application for title for any Delaware registered vehicle within 30 days of the date of delivery.
6. Dealer Plates can only be used on vehicles owned by the dealership and a written log of their usage must be maintained.
7. A dealer must disclose to a buyer if a vehicle title is or will be branded as reconstructed, flood-damaged, salvage, rebuilt salvage, or previous taxi. Disclosure forms can be obtained from any Division of Motor Vehicles facility.
8. The dealership must hold a valid Delaware Division of Revenue business license.
9. A Completed Federal Trade Commission Buyer’s Guide must be displayed on a side window of all used cars and
trucks with a GVWR less than 8,500 pounds. Motorcycles are exempt.
10. The Division must immediately be notified of any vehicle received by the dealership for resale (Dealer’s
Notification of Used Vehicles Received- MV60 form). Forms are now available on dealers.dmv.de.gov, where
you can submit your MV60 electronically, or any Division of Motor Vehicles facility.
11. A dealer must comply with the terms of all warranties or guarantees.
12. A dealership owner (except new vehicle dealerships) must be a Delaware resident.
13. A dealership may be held responsible for the acts of its sales people as well as its principal members.
14. Wholesale dealers may NOT 1) sell or exchange vehicles with a retail buyer 2) buy, sell or exchange new vehicles and 3) sell vehicles on consignment.

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