Car Dealership | What is a Surety Bond for Used Auto Dealers?

Car Dealership | What is a Surety Bond for Used Auto Dealers?


Hey, this is Mike from your car dealer bond a question I get it frequently is what is a surety bond for auto dealers and it’s real so it’s it’s very It’s an insurance product, but it’s not insurance dealer insurance or Typically any type of insurance there’s a deductible which means that you’re gonna pay the first dollar up to a certain amount Let’s say thousand dollars on a dealer policy. That’s probably average So you get a thousand dollar deductible, which means that if you caused a car accident? or if your car gets stolen perhaps you’re gonna pay the first thousand dollars of that claim and then if there’s If you’ve got a five thousand dollar claim on your hands Then you would get a four thousand dollar check because you’re paying the first thousand dollars of it so that’s sort of the way that that works and They charge a certain amount of it You know, you can usually make a down payment and then make monthly payments after that That’s dealer insurance That’s not a bond a bond is very different a bond is Basically a guarantee from a third party the guarantee is coming from the surety company saying that if this dealer if this if this business that we’re offering the surety bond for in this case an auto dealer if this Dealer stops making his payments to the auction Has a claim against another dealer because they didn’t pay up Maybe they offered a warranty but didn’t pony up. Maybe they didn’t maybe they sold a car that’s now been You know on on suspect pretenses or whatever have you those ballin claims that could happen The DMV fees a lot of DMV fees. We said they’re not much. They’re 50 60 bucks. Maybe even 20 bucks I’ve seen them as low as five and If you owe the DMV money And you think you’re gonna skate away with how all happy-go-lucky? You’re not gonna stiff the DMV. They’re gonna hit your bone. Once the bone company pays out They give you a certain amount of time to pay it back they may charge you a little bit of an admin fee for having to push around the paper and then they’re gonna turn around and They’re gonna hit you’re they’re gonna cancel your bond if that bond gets cancelled They tell the DMV the DMV shuts down your license you guys start everything all over go back to the education the pre-licensing It’s not continuing it anymore. It’s it’s pretty licensing. You’re gonna turn around you’re gonna have to Go through the entire rigmarole again of getting lice and take a DMV test all of that stuff Because your bond got cancelled because there was a bond climb and they want every penny back There is no you pay the first X amount and then they pick up the tab on the rest. You pay every penny This bond is saying that you are Going to fulfill your obligations, and if you don’t this bond is gonna step up and protect the public protect the DMV Which is the state which is gonna protect other Dealers from that dealer that’s going out and causing these claims and it’s gonna protect the auction That’s why when you go take that bond demand up when you go to Mannheim when you first go to Mannheim you go to a desk that you’re gonna brash yours I don’t care where you’re going you end up in one of these the first thing they’re gonna ask you for is a bond why because they’re gonna hit your bond if you stop paying here making your payment so That’s what a surety bond is for an auto dealer used-car dealer motor vehicle dealer, whatever you want to call it That’s what it is in different states There’s different amounts specifically in California If you’re a wholesale dealer that’s selling 24 cars or less per year 24 cars or less per year wholesale only $10,000 bond if you’re selling 25 cars or more That’s a $50,000 bond. If you’re still doing wholesale only, I guess what if you’re retailer $50,000 bond. I don’t care if you do one car I don’t care if you’ve done thousands a day $50,000 bond you’re an auto broker $50,000 bond. I don’t care if it’s one car a day whether it’s a thousand cards a day $50,000 bond wholesale dealers selling fifth or 25 cars or more per year $50,000 behind you. Got it. So fifty thousand our bond Here’s the carve out if you’re a retail motorcycle only motorcycle only only I Know he said but twice a year. I got a trade-in Motorcycle only retail dealership you can get away with the $10,000 bond everywhere every other segment of Licensees will have to have the 50 thousand dollar bond those are the two most common questions I get is can I get away with getting ten thousand our bond and What is the surety bond exactly and how is that different from? Insurance. So there it is. This is mine from your car dealer barn. Thanks for hanging in there subscribe down below, please subscribe Down below if you got anything out of this if you’ve got some dealer buddies that you guys Chum around at the auction you guys Please let them know we’d send them a link to this thing. Put them up to this date Cuz the more eyeballs we get on this the more often We’re gonna put this out the more comments you guys leave below as far as well. So you want to see Content on will put it out there That’s the easy part, but the tough part is getting you guys to watch it because I know you you guys got everything in the world happening and watching my videos the last thing you guys want to do but play this is is Gonna help you I think for every hour of content that you probably digest you probably gained a minimum of $200 worth of value Once you’ve actually heard a lot of the tips and tricks that I’m giving you guys hacks now This isn’t for everybody cuz some of you guys already have your bone in place I get it, but this one Specifically is for some of those that don’t really understand it newbies getting into the business if you need up on your car dealer bond We can help you with you might have figured that out It’s what we do we’ve done it for years. We’re a small family-owned Agency this that just wants to earn your business Don’t go float your business out to these guys in Ohio or out in the middle of nowhere, Oregon, Washington Pennsylvania, Florida Family-owned company there were small family-owned agency. We’d love to earn your business. We’re gonna give you a awesome rate on it We’re in a fantastic service and things like this are gonna come for free Let us earn your business on this we’d love to Help you in any way we can thanks so much. This is my cat your car dealer bon

About the Author: Michael Flood

3 Comments

  1. I’m new to this business and your interesting to listen to…..I just passed the DMV test but don’t know which direction to go to. I’m leaning towards wholesale because I don’t have the overhead to lease a lot and so fourth.

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