A Nevada MVD Bond is a type of surety bond that is required by the Nevada Department of Motor Vehicles (DMV) for certain motor vehicle-related businesses. The bond protects consumers from any fraudulent or dishonest activities by the business. The bond amount is based on the type of business and the estimated annual gross income. The bond must be filed with the DMV and the cost of the bond is typically around 1-2% of the total bond amount. The bond remains in effect for as long as the business is in operation and must be renewed every year to remain valid. If a claim is made against the bond, the surety company pays the claim up to the full bond amount and the business is then responsible for repaying the surety company.
What is an Nevada Car Dealer Bond?
Nevada Car Dealer Bonds are required by the state of Nevada's DMV to obtain your Dealer license. The MVD Bond amount for the sale of New and used vehicles is set at $100,000. 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:
$100,000 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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Nevada MVD Bond Requirements and Information
In lieu of the surety bond requirement, a registrant or business entity may deposit an appropriate penal sum cash bond with the Secretary of State. A cash bond must be submitted to the Secretary of State by cashier’s check in the full amount payable to the State of Nevada with a Cash Bond deposit form. Pursuant to NRS240A.120, the Secretary of State may retain the cash bond until the expiration of 3 years after the date the registrant has ceased to do business, or 3 years after the date of the expiration or revocation of the registration, to ensure that there are no outstanding claims against the bond. Contact this office for additional information on filing a cash bond.
Purchasing a Surety Bond
The Secretary of State does not regulate the price for securing a surety bond. Prices will vary depending upon factors. The price is set by the marketplace and the surety companies who issue bonds. Contact a surety bonding company authorized to do business in Nevada for information on cost and how to obtain a surety bond.
The surety bond may be issued for an individual performing document preparation services in Nevada, or may be issued to a business entity performing document preparation services in Nevada.
Surety issued to an individual performing document preparation services
A surety bond issued to an individual must be for the minimum penal sum of $25,000 with the individual named as principal and must include any fictitious name under which the business owner is conducting or advertising document preparation services.
A sole proprietorship may not file a business entity bond, however, a sole proprietor may hire employees. In that instance, each employee must have his or her own individual bond in their name. In some instances, a sole proprietorship may be issued to a husband and wife or registered domestic partners. In that instance, each person must have an individual bond in his or her name.
Bond issued to a business entity that has one or more employees who perform document preparation services for the business entity
A business entity that has one or more employees who perform document preparation services may file with the Secretary of State a cash or surety bond in the appropriate penal sum on behalf of all employees of the business entity who are registered as a document preparation service and provide document preparation services for the business entity. The surety bond must be executed with the business entity as principal (except if a business entity employs only one registrant to perform document preparation services, the registrant must be named as principal in the bond filed).
If a business entity files a cash or surety bond, the employees of the business entity who are covered by the bond are not required to file a separate individual bond.
The business entity bond must cover the period of registration of each employee of the business entity. For purposes of determining the amount of the penal sum required, the number of registrants employed by the business entity is the greatest number of registrants who will perform document preparation services for the business entity at any time during the year, including without limitation, on a temporary or seasonal basis.
The business entity must maintain with the Secretary of State a list of employees covered by the business entity bond. The business entity must notify the Secretary of State when a registrant is no longer employed by the business entity. That individual’s registration, if not expired, will be suspended by operation of law pursuant to NRS 240A.120.
The registrant may be reinstated if, before the current term of the registration expires, the registrant files a new bond with the Secretary of State.
Annual Bond Renewal
· While a surety bond may be continuous unless cancelled or exhausted, this office must receive proof of annual bond renewal. Proof of a surety bond renewal may be submitted in the form of a Continuation Certificate or a paid invoice showing zero balance due, bond number, and bond term. Both of these documents can be obtained from the surety company that issued the bond. If a new surety bond is purchased, this office must receive the original signed surety. There can be no lapse in bond coverage.