What is an Massachusetts Car Dealer Bond?
Massachusetts Car Dealer Bonds are required by the Commonwealth of Massachusetts Registry of Motor Vehicles to obtain your Dealer license. The MVD Bond amount for the sale of New and used vehicles is set at $25,000. 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.
The State requires a Car Dealer bond for each license you hold:
$25,000 surety bond for New and Used Motor Vehicle Dealers, Public Consignment Auction Dealers
Different parts of a bond:
There are 3 parts to a MVD surety bond. The Principal "YOU", The Surety Company, and the Obligee. The Principal is the business or individual applying for the MVD Surety Bond. The Obligee is the individual or entity requiring the Surety Bond and the Surety Company is the company who provides the Surety Bond coverage.
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Massachusetts MVD Bond Information and Requirements:
Massachusetts Automobile Dealers use Dealer Reassignment of Title (DRT-1) for:
Reassignment of Title. - When all other reassignments on the Title have been completed, the selling Massachusetts dealer completes the front side. Do not use the DRT-1 if:
Always use the first available reassignment.
Authorization for Loan Payoff. - Complete the back side as an assignment and authorization for payoff. The vehicles owner(s) must sign, print name, date, and disclose the mileage on the form. This authorizes the dealer to pay off the lien and get the title from the lienholder. Provide the lien holder a copy of the form along with payment. When you receive the title, attach the original DRT-1 to it.