What Is an Auto Dealer Bond - A Guide for Florida Car Dealers

To get your auto dealer license in Florida, you need to do quite a few things. That includes finishing hours of pre-license education, completing the Florida Department of Highway Safety and Motor Vehicles (HSMV) application, paying the fee, getting insurance, and getting a bond.

It’s a lot. With so much to handle to get properly licensed with the HSMV, you don’t want to have to waste time figuring out the details around each requirement. And because information about the required bond is fairly limited on the HSMV website, that can feel like a big question mark. 

Don’t worry. By the time you finish this guide, you’ll know exactly what bond is required to become a licensed auto dealer in the state of Florida. 


What are the auto dealer bond requirements from the Florida HSMV?

You’ll need to get a bond if you plan to get any of the following license types in Florida:

  • Licensed independent dealer (VI)
  • Wholesale dealer (VW)
  • Salvage dealer (SD) 
  • Auction dealer (VA)
  • Franchise dealer (VF)

Mobile home and RV dealers and brokers need bonding, too, but we won’t get into those details here. 


If you want to get any of the above license types, you have a few options for meeting the HSMV bond requirement. You can present any of the following with your auto dealer license application:

  • A copy of your original surety bond
  • An irrevocable letter of credit
  • An original continuation certificate (extending an existing surety bond)


The surety bond is the most common route. If you don’t have a bond yet, you’ll need to contact a surety bond company and work with a surety agent to get one. Specifically, you’ll need a bond in the amount of $25,000 in order to get a Florida auto dealer license. Once you get it, you’ll need to submit this form to prove it to the HSMV.


Why do Florida auto dealers need a bond?

This bond protects the people you serve. If you don’t follow Florida law or auto dealer regulations in a transaction with a customer (for example, you misrepresent a vehicle to them) and it results in their harm, they can make a claim against your bond. It’s a little like insurance for your consumer. By having a bond of $25,000, you ensure that money can be paid to people who deserve it if you make a mistake. 


Ideally, an unhappy customer who believes you’ve acted unethically will contact you first. By working with them to resolve their complaint, you may be able to avoid their filing a claim with your bond. If a claim is filed and the surety bond company finds it valid, they’ll pay the claim amount from your surety bond. At that point, you’ll need to reimburse them for the cost of the claim. 


How much do auto dealer bonds cost for Florida car dealers?

A bond for $25,000 doesn’t mean you need to come up with 25k cash. Instead, you’ll pay a premium to your surety company for the bond. The better your credit score, the less you’ll pay, but you can usually expect your premium to be between 1 and 3% of the bond amount. In other words, the cost of your bond should stay in the three-figure range.