Virginia MVD Bond

Summary

A Virginia Motor Vehicle Dealer Bond (MVD) is a type of surety bond that is required by the Virginia Department of Motor Vehicles for motor vehicle dealers in the state of Virginia. The bond guarantees that the motor vehicle dealer will comply with all applicable laws and regulations, and that they will act in good faith when dealing with customers, vendors, and the state of Virginia. The bond also serves as a financial guarantee that the motor vehicle dealer will pay any fines or judgments that may be imposed as a result of any violations of the law. The bond is typically for a period of one year and the amount of the bond is determined by the Virginia DMV. Failure to maintain the bond, or failure to comply with the regulations, can result in the suspension or revocation of the motor vehicle dealer's license.

What is an Virginia Dealer Bond? 

Virginia Car Dealer Bonds are required by the Commonwealth of Virginia to obtain your Dealer license. The MVD Bond amount for the sale of New and used vehicles is set at $50,000.  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 DMV  bond for each license you hold:  

$50,000 surety bond for New and Used Motor Vehicle Dealers, Public Consignment Auction Dealers

$25,000 surety bond for motorcycles, trailers, or T and M vehicle dealer

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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Program:

You can buy your Virginia Car Dealer bond (Apply) online immediately

Virginia MVD Bond Information and Requirements:

Applicants for a renewal of a motor vehicle dealer's license may elect to obtain and continuously maintain a bond in the amount of $100,000 in lieu of participation in the Motor Vehicle Transaction Recovery Fund, provided that such applicants have not been the subject of a claim against a bond issued pursuant to § 46.2-1527.2, or against the Fund for three consecutive years. The bond shall come from a corporate surety licensed to do business in the Commonwealth and approved by the Attorney General and shall be filed with the Board. The bond shall be conditioned on a statement by the applicant that the applicant will not practice fraud, make any fraudulent representation, or violate any provision of this chapter in the conduct of the applicant's business. In those cases in which the surety of a dealer electing continuous bonding under this section shall be liable pursuant to this section, the maximum liability to one claimant against the surety by reason of a claim involving a single transaction shall be limited to $20,000 regardless of the amount of the claim by one claimant, and the aggregate liability of the dealer's surety to any and all persons, regardless of the number of claims made against the bond or the number of years the bond remains in effect shall in no event exceed $100,000.

An applicant for a renewal of a motor vehicle dealer's license who is a member of a nonprofit organization established under 26 U.S.C. § 501(c) (6) that provides on behalf of its membership a blanket or umbrella bond in the amount of $1 million satisfies the bonding requirements of this section. When posted, a blanket or umbrella bond shall be considered a dealer bond for the purposes of § 46.2-1527.10. The bond shall come from a corporate surety licensed to do business in the Commonwealth and approved by the Attorney General and shall be filed with the Board. In those cases in which the nonprofit organization's surety shall be liable pursuant to § 46.2-1527.10, the maximum liability to one claimant against the surety by reason of a claim involving a single transaction shall be limited to $20,000, regardless of the amount of the claim by one claimant, and the aggregate liability of the nonprofit organization's surety to any and all persons for claims against a single dealer shall in no event exceed $100,000. In those cases in which the nonprofit organization's surety shall be liable pursuant to § 46.2-1527.10, the maximum liability to any and all persons, regardless of the number of claims made against the bond or the number of years the bond remains in force shall in no event exceed $1 million.

The Board may, without holding a hearing, suspend the dealer's license during the period that the dealer does not have a sufficient bond on file. Dealers bonded under this article and those salespersons employed by such dealers shall be exempt from the Fund fees specified in § 46.2-1527.1.