What is an Wisconsin Dealer Bond?
Wisconsin Car Dealer Bonds are required by Wisconsin's DMV 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 Car Dealer bond for each license you hold:
$50,000 surety bond for New and Used Motor Vehicle Dealers, Public Consignment Auction Dealers and for any other type of 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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Wisconsin MVD Bond Information and Requirements:
A $50,000 surety bond or irrevocable
letter of credit. For a list of insurance companies accepting applications
for bonds, see Insurance companies that accept applications for bonds.
Note: If you are selling only motorcycles, you need a $5,000 bond or
letter of credit.
To qualify for a retail dealer license you must meet all of the following requirements:
- A permanent business location—not a residence—with office space, a 12x20-foot indoor vehicle display area. Note: If you are selling only motorcycles, display area need only be large enough to display or repair three motorcycles.
- An outdoor vehicle display lot adjacent to the business office, unless all vehicles are displayed indoors. The minimum size of the vehicle display lot must be equal to the size of a standard parking stall, in accordance with local or county zoning requirements.
- Zoning and local permit approval for the location.
- A sales tax seller permit is required. To obtain one, contact the Department of Revenue at (608) 266-2776 or on their website under Sales and Use Tax.
- A $50,000 surety bond or irrevocable letter of credit. For a list of insurance companies accepting applications for bonds. Note: If you are selling only motorcycles, you need a $5,000 bond or letter of credit.
- A service department or written agreement with a service facility within 50 miles from the selling dealership location.
- At least one licensed salesperson. That could be you or someone else.
- A business sign and posted hours.
- A lease for the business real estate unless the license applicant owns it.
- A manufacturer’s certificate of appointment (franchise) if you will be selling new vehicles.
- Dealer license fee, dealer plate fee, and fee to the Department of Financial Institutions. (More information on fees follows.)
- You must be at least 18 years old.
- You must be of good character, and must not have been convicted of a serious crime directly related to the sale of motor vehicles.