A South Dakota MVD Bond is a type of surety bond required by the state to ensure that Motor Vehicle Division (MVD) businesses comply with state laws and regulations. This bond is a guarantee that the business will operate in accordance with all state laws and regulations, including those related to the sale and titling of vehicles, and that any fines or fees associated with violations of the laws and regulations will be paid. It is also a guarantee that money will be available to cover any claims that may arise from any violations that the business may commit. The bond is a requirement for all businesses that are engaged in vehicle sales or titling. The bond amount is determined on a case-by-case basis and is usually based on the estimated volume of business the company does.
What is an South Dakota Car Dealer Bond?
South Dakota Car Dealer Bonds are required by South Dakota's Department of Revenue and Regulation 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 and any other type of dealer
Boats - $20,000
Trailers (over 3,000 pounds) - $10,000
Motorcycle/Off-Road Vehicle and Snowmobiles - $5,000
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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South Dakota MVD Bond Information and Requirements:
Dealers are required to maintain a surety bond issued by a bonding company qualified to do business in South Dakota. Any dealer renewing his South Dakota dealer license, and who has already filed such surety bond with the department, need not file any further bond; unless the dealership name changes or a new bond is obtained.