Florida Dealer Bond

Florida Dealer Bond


Florida MVD Bond


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A Florida motor vehicle dealer (MVD) bond is a surety bond required by the state of Florida that holds auto dealers accountable to regulations on a local and state level. Florida MVD bonds help protect Floridians against fraud and other car buying mishaps, such as buying a lemon. This surety bond helps consumers avoid bad dealership practices. 


It’s worth noting that you will hear MVD bonds referred to by other names such as: auto dealer bond, car dealer bond, used car dealer bond, dealer bond, DMV bond, bond for dealer’s license, and motor vehicle bond. 


If you own a Florida car dealership, keep reading to learn more about what Florida MVD bonds are, how they work, what they cost, and how to secure one for your dealership. 

Florida MVD Bond Definition and Examples

In general, MVD bonds are legally required to make sure that automotive dealers remain compliant. A Florida MVD bond is simply this type of bond as required in the state of Florida. Consumers can rest easier when they shop at a dealership that has an MVD bond as it illustrates that they are licensed and following the law. 


A Florida MVD bond protects consumer interests by shielding dealership customers from shady business practices like: 


Misrepresenting the condition of a vehicle


Falsifying or omitting details on the repair or accident history of the vehicle


Issuing a fraudulent certificate of title


Failing to pay the required motor vehicle fees (such as the title or registration)


Selling a car that is clear of the prior owner’s interest and liens


Not following the required tax laws


Selling a stolen vehicle


Not fulfilling a warranty


Not reporting the sale of a vehicle


There are three parties involved in a Florida MVD bond:


Principal. The automotive dealer who receives the bond.


Obligee. The party that requires dealerships to obtain the bond—most often a government agency.


Surety. The company that issues the MVD bond and guarantees to the obligee that the principal will comply with all requirements.  

What is an example of a Florida Dealer Bond/Florida MVD Bond?

Let’s say a newlywed couple purchases a used car from the South Beach Car Dealer. The couple buys the car and they drive off the lot into the sunset. Imagine their surprise when the car breaks down the very next day because the dealer (aka the principal) failed to test the car’s safety before they sold it to the happy couple. Now the couple has medical and auto repair bills on their hands because of this negligence. Chances are, they’ll file a hefty claim against the principal’s Florida MVD bond to cover the cost of car repairs and any damages incurred.

How Does a Florida MVD Bond Work?

In the state of Florida, dealers have to secure a Florida MVD bond in order to qualify to obtain their Dealer license. The Florida MVD bond is typically set at $25,000 and ensures that the principal (remember, this is the dealer), complies with any conditions of contracts made by such licensee in connection with the sale or exchange of any motor vehicle. They agree not to violate any of the provisions of law that relate to the conduct of the business they are licensed for. 


In the great state of Florida, the following people, partnerships, and corporations must obtain a dealer license in order to operate:


Entities that buy, sell, offer for sale, display for sale, or deal three or more auto vehicles within a single 12-month period.


Entities that buy, sell, offer for sale, display for sale, or deal one more recreational vehicle or mobile home within a single 12-month period.

What to Keep in Mind When Shopping for a Florida MVD Bond

If you find yourself in need of a Florida Dealer bond, you’ll want to compare the bonding capacity, premium, and term of each bond you consider. 


Bonding capacity. Sometimes you’ll hear the bonding capacity referred to as the bonding amount. Either way, these terms refer to the highest amount an individual can claim if the principal is found to have done something they shouldn’t do. If a maximum bonding capacity is $50,000, that is the highest amount the bond would cover in losses and damages. The maximum bonding capacity varies on a state to state basis. In Florida, the bonding capacity amount is set at $25,000.


Bond premium. This refers to what it will cost you to purchase an MVD bond. Typically MVD bonds cost between 1% and 10% of the bond amount. We have special programs that can go as low as $188 a year


Bond term. In most states, bond terms only last a year and need to be renewed annually. Florida Dealer bonds expire April 30th


Apply online for a Florida MVD bond today! Pricing starts at just $188.


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Florida Dealer Bond Requirements and Helpful Information:

A minimum surety bond of $25,000 is required with a car dealer license. 

Motor vehicle, mobile home and recreational vehicle dealers must meet the licensing requirements of the Florida Department of Highway Safety and Motor Vehicles (FLHSMV) to conduct business in Florida. Please see sections 320.27320.77 and 320.771, Florida Statutes, and Florida Administrative Codes, 15C-7.003 and 15C-7.004 for additional information.

The following persons, partnerships and corporations require a dealer license in the state of Florida:

 Applicants must complete the following steps in order to obtain their dealer license:

Step 1, Locate your nearest compliance examiner by going to our locations page, selecting your county and scroll to the Motorist Services Regional Offices section. Requirements for location, display space and office for motor vehicle dealers can be found in Florida Administrative Code 15C-7.003.  Requirements for location, display space and office space for mobile home dealers and recreational vehicle dealers can be found in can be found in sections 320.77 and 320.771 (320.77(3)(g)(h)(i), 320.771(3)(g)(h)(i)), Florida Statutes.

Step 2, Obtain a Federal Employee Identification Number (FEIN from Internal Revenue System);

Step 3, Obtain a sales tax number from the Florida Department of Revenue;

Step 4, Complete a pre-licensing dealer training class requirement from a FLHSMV approved dealer training school; and

Step 5, Obtain electronic fingerprinting for all officers of the dealership from a Florida Department of Law Enforcement approved service provider.

Step 6, Submit a completed application (see form 86056) to FLHSMV with required documents (see below) and fee to the regional office responsible for the dealership;

Step 7, Provide proof of Garage Liability Insurance to the FLHSMV for a minimum of $25,000 combined single-limit liability coverage including bodily injury and property damage protection and $10,000 personal injury protection. Independent, auction and wholesale dealer applicants have the option to submit a general liability insurance policy coupled with a business automobile policy, which shall include, at a minimum, $25,000 combined single-limit liability coverage including bodily injury and property damage protection and $10,000 personal injury Salvage dealers are exempt from this requirement;

Step 8, Provide the FLHSMV with the original surety bond form 86020 for motor vehicle dealers; form 86019 for recreational vehicle dealers and form 86018 for mobile home dealers)

Step 9, Provide proof of registration to the FLHSMV of the business entity and fictitious name, if any, with the Florida Division of Corporations.

Step 10, Provide a copy of completion of dealer training to the FLHSMV; The applicant will be awarded a certificate of completion by a Department approved Dealer Training School after they complete the pre-licensing class. A copy of this certificate of completion is required with the license application.

Step 11, Provide a copy of a lease agreement to the FLHSMV

Step 12, Provide a proof of electronic fingerprinting to the FLHSMV from an FDLE service provider. Applicant must contact the FDLE approved service provider and be electronically fingerprinted. The provider will give the applicant a receipt and submit the fingerprints to FDLE.  Applicant must attach a copy of this receipt with their license application.

Different Dealer Licenses and definitions: 


Vehicle Franchised dealer (VF): Allows a licensed dealer to sell new motor vehicles under an established agreement with a manufacturer, importer or distributor. See sections 320.27 and 320.642, Florida Statutes, for additional information.


Service facility (SF): Any franchised dealer wishing to operate their service and repair facility at a location other than their licensed dealership must also be licensed to operate the service only facility. No vehicle sales, new or used, are permitted at this facility. See section 320.642 (6), Florida Statutes, for additional information.


Vehicle Independent dealer (VI): Allows the licensed dealer to buy, sell or deal in used motor vehicles. See section 320.27, Florida Statutes, for additional information.


Vehicle Wholesale dealer (VW): Allows the licensed dealer to buy, sell or deal in motor vehicles only at wholesale with other licensed dealers. A licensed wholesale motor vehicle dealer is licensed to engage exclusively in the business of buying, selling or dealing in motor vehicles at wholesale or through motor vehicle auctions. See section 320.27, Florida Statutes, for additional information.


Vehicle Auction dealer (VA): Allows licensed auction dealers to sell motor vehicles and recreational vehicles by the bid process where buyers are licensed motor vehicle dealers. Auctions that plan to sell motor vehicles at retail are required to be licensed as an independent dealer with a VI prefix license. See section 320.27, Florida Statutes, for additional information.


Salvage dealer (SD): Allows a licensed salvage dealer to engage in the business of acquiring salvaged or wrecked motor vehicles for the purpose of reselling them, or for parts. See section 320.27, Florida Statutes, for additional information.


Mobile home dealer (DH): Allows licensed mobile home dealers to buy, sell or deal in mobile homes. Mobile home dealers may also sell recreational vehicles after applying for a recreational vehicle endorsement on their license with FLHSMV. See sections 320.77 and 320.771(8), Florida Statutes, for additional information.


Mobile home broker (BH): Allows a licensed mobile home broker to deal exclusively in used mobile homes and act as the agent or intermediary on behalf of the owner or seller of a used mobile home which is for sale, or who assists or represents the seller in finding a buyer for a used mobile home. See section 320.77, Florida Statutes, for additional information.


Recreational motor vehicle dealer (RV): Allows a licensed recreational vehicle dealer to engage exclusively in buying, selling or brokering new recreational vehicles. See section 320.771, Florida Statutes, for additional information.


Recreational used motor vehicle dealer (RU): Allows a licensed recreational vehicle dealer to engage exclusively in buying and selling used recreational vehicles. See section 320.771, Florida Statutes, for additional information.

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