Minnesota Auto Dealer Bond
Minnesota Dealer Bonds & Insurance

Do I need a Minnesota auto dealer bond?

You need a Minnesota auto dealer bond and dealer license from the Department of Public Safety (DPS) if you sell or participate in the sale of five or more new or used vehicles in a 12-month period.

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Auto dealers aren’t the only ones who need this license in Minnesota. Here’s who needs to get a dealer license and usually a surety bond:

 

Used parts and scrap metal dealers are the only two licensees who do not need the same Minnesota surety bond as motor vehicle dealers.

 

Most of these licenses require a $50,000 MN surety bond, while small new trailer dealers need only a $5,000 bond. Some small new trailer dealers could be exempt from the bond requirement under certain circumstances:

  • If the dealer’s gross receipts from trailer sales totaled $500,000 less during the previous year
  • If the dealer has been in business for less than one year and the Minnesota DPS determines the dealer will have less than $500,000 in gross receipts for the year

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This bond is required to ensure that auto dealers in Minnesota adhere to their licensing laws and do not deceive customers during the course of business. If the principal, the bondholder, does break laws and cause customers financial damage, customers can file a claim against the bond to seek reimbursement.

 

How much does this bond cost?

Minnesota auto dealers need a $50,000 surety bond—a fairly common amount for the industry. But you’ll only pay a portion of that amount each year, called a premium, for $50,000 of surety bond coverage. Bond premiums usually range from 0.5% to 5% of the bond’s total coverage amount. Applicants with excellent credit could pay as little as $250 for their bond!

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Call Absolute Surety for your Minnesota motor vehicle dealer quote today!

 

How does my credit score affect my bond premium?

In most cases, the higher your credit, the lower your bond premium will be. And since your credit changes, your bond premium can change, too. Every time you renew your bond, you’ll receive a new quote based on your current credit score.

 

Don’t let subpar credit worry you—Absolute Surety can help you get the best bond rate!

 

When do Minnesota auto dealer bonds expire?

These are continuous surety bonds, meaning they are valid as long as you continue to pay the annual premium. Don’t let your bond coverage lapse—it’s a requirement for your license, so if you’re not bonded, your license technically isn’t valid.

 

I just purchased my Minnesota auto dealer bond — now what?

File your surety bond with attached power of attorney with the state:

 

Minnesota Department of Public Safety

Dealer and Vehicle Services

445 Minnesota St

Suite 186

St Paul, MN 55101

 

Resources

Getting a Minnesota auto dealer license

Dealer licensing forms

Minnesota Statutes Section 168.27