Auto dealer bonds by state and license type

Opening a dealership involves a long checklist. The surety bond deserves its own line because the amount printed on an old application, a neighboring state's requirement or a competitor's bond may not fit your business.

A dealer bond addresses obligations under the applicable law and bond form. It should not be treated as coverage for every loss at your lot. Start with the exact license you are requesting, then check the current instructions from that state's regulator.

Georgia's enacted Senate Bill 293 increased the used motor vehicle dealer bond amount from $35,000 to $50,000, effective July 1, 2026. The law leaves a separate $10,000 requirement for used motor vehicle parts dealers. These are different categories. Georgia SB 293, sections 2-2 and 3-1

Some older Georgia licensing materials still show $35,000. If your current bond or renewal packet uses that amount, contact the licensing board and your bond provider to confirm the adjustment and accepted form. Do not assume an older form establishes a grace period or that an existing bond changed automatically.

The examples below show why a generic “auto dealer bond” search is only the beginning. They are not a complete licensing guide, and the amounts are bond amounts, not purchase prices.

• New Jersey: MVC lists a $10,000 surety bond in the dealership's business name and address, with an expiration date aligned to the licensing year, for its new/used dealership and leasing-license process. NJ MVC requirements
• Pennsylvania: PennDOT's dealer-registration-plate provisions generally require a $20,000 bond, with exemptions and provisions for an acceptable bond already on file. This is not a universal amount for every dealer-related activity. Tag and title agent services have a separate bonding requirement. PennDOT dealer handbook, section 1335
• Maryland: The bond for used-only dealers, including wholesalers, ranges from $15,000 to $150,000, depending on sales volume. New-vehicle dealer amounts range from $50,000 to $300,000. New applicants generally use estimated first-year sales, subject to statutory minimums and an existing-location exception. Maryland Transportation section 15-308
• Florida: New- and used-motor-vehicle dealer applicants under section 320.27 must provide a $25,000 surety bond or irrevocable letter of credit. Separate categories, such as mobile-home and recreational-vehicle dealers, should not be assigned that amount without checking their rules. Florida dealer statute
• Colorado: The dealer/wholesaler application specifies a $50,000 bond, with a $5,000 amount for qualifying small-trailer dealers selling trailers weighing less than 2,000 pounds. Colorado dealer application instructions

Sonon also serves Delaware, Virginia and Illinois. An omitted state is not an indication that no bond is required. Ask for the current instructions for your specific license and location.

A title bond addresses a vehicle ownership-documentation issue. It does not substitute for a dealership's licensing bond. Georgia, for example, has a separate bonded-title procedure for eligible vehicles with insufficient ownership documentation. Georgia bonded-title guidance

Likewise, the dealer bond should not be counted as inventory protection or accident liability coverage. Florida's statute treats its dealer insurance requirements separately from its bond or letter-of-credit requirement. Bring both parts of your application to an insurance review, along with information about your inventory, test drives, employees and services. Florida section 320.27

Before applying, assemble:

1. The state and precise dealer license category, including retail, wholesale, new, used or a specialty category.
2. The legal entity name, DBA and address shown on the application.
3. Whether this is a new license, renewal, replacement bond or added location.
4. Sales figures or estimates when the regulator uses volume to set the amount.
5. The required bond form, amount, effective date and filing deadline.
6. The regulator's instructions for signatures, originals and submission.

For a growing Maryland dealership, checking sales volume at renewal can be as important as checking the expiration date. A business adding a location should ask how the regulator treats that location rather than assuming the existing bond extends to it.

Review the actual quote and agreements before purchasing. The premium is what you pay; the bond amount is the required financial guarantee. Read any reimbursement, collateral and cancellation terms rather than treating the bond as a way to transfer every dealership obligation. Surety bond basics

Propeller lists auto dealer bonds among its commercial offerings. You can start through Sonon Insurance's Propeller portal using the state where the bond is required. Availability and approval depend on the specific bond and underwriting. Propeller commercial bonds

If the catalog does not match your license, or an old form conflicts with a newer requirement, send Sonon Insurance the written instructions before proceeding. After issuance, follow the regulator's filing instructions and confirm acceptance. A purchased bond is one part of licensing, not permission by itself to begin selling vehicles.

Requirements reviewed October 23, 2026. Confirm current requirements with your licensing authority before purchasing or renewing.