Instantly purchase or get a quote on an Illinois Motor Vehicle Dealer Bond
Like many states, Illinois requires motor vehicle dealers to be licensed and to post an Illinois Motor Vehicle Dealer Bond to protect the public. these bonds can also be called a Designated Agent Bond for Illinois Vehicle Dealers. Illinois has had as much as $41.22 Billion in cars sales. Learn more about these auto dealer bonds, including how to instantly purchase them online.
According to Illinois code 625 ILCS 5/5-101, Ch. 95 1/2, both new and used motor vehicle dealers in the state of Illinois must be licensed. The code reads:
New Dealer
“No person shall engage in this State in the business of selling or dealing in, on consignment or otherwise, new vehicles of any make, or act as an intermediary or agent or broker for any licensed dealer or vehicle purchaser other than as a salesperson, or represent or advertise that he is so engaged or intends to so engage in such business unless licensed to do so in writing by the Secretary of State under the provisions of this Section.”
Used Dealer
“No person, other than a licensed new vehicle dealer, shall engage in the business of selling or dealing in, on consignment or otherwise, 5 or more used vehicles of any make during the year (except house trailers as authorized by paragraph (j) of this Section and rebuilt salvage vehicles sold by their rebuilders to persons licensed under this Chapter), or act as an intermediary, agent or broker for any licensed dealer or vehicle purchaser (other than as a salesperson) or represent or advertise that he is so engaged or intends to so engage in such business unless licensed to do so by the Secretary of State under the provisions of this Section.”
Other
Additionally, manufactured home dealers and auto wreckers and rebuilders must also be licensed and bonded.
An Illinois Motor Vehicle Dealer Bond serves two purposes. It guarantees that a dealer in the state will collect and remit all title and registration fees, along with taxes to the Illinois Secretary of State. Secondly, it guarantees that the motor vehicle dealer will comply with all laws of the state of Illinois.
The motor vehicle dealer (the principal) guarantees that they will abide by the terms of the state. The dealer pays a third-party bond company (the surety) to provide a financial guarantee to the Illinois Secretary of State (the obligee) on behalf of the public. Should the motor vehicle dealer not remit monies owed, or break state law, a claim can be made against the motor vehicle dealer bond. The surety will have to pay the monies owed, up to the bond penalty. The surety can then seek reimbursement from the motor vehicle dealer under the indemnity agreement.
The state of Illinois requires that both new and used vehicle dealers post an Illinois Motor Vehicle Dealer Bond in the amount of $50,000 for each location. Dealers with more than one location will need multiple dealer bonds.
The most the surety bond company is required to pay is the amount of the bond (the bond penalty). This is regardless of the dollar amount of claims, or number of claims filed. However, the surety’s payment generally does not relieve the motor vehicle dealer of the additional amounts owed.
The average Illinois Motor Vehicle Dealer Bond costs 1% of the bond amount. For example, a single $50,000 bond will cost $500 per year for most dealers. However, preferred pricing can be as low as $410 per year for a $50,000 bond. Those prices are for motor vehicle dealers with good credit or strong financial statements.
Keep in mind that the bond premium will be due annually for each year that the dealer bond remains in place. Learn more about Surety Bond Costs and how to reduce them here.
Illinois Motor Vehicle Dealer Bonds can be purchased online in minutes for most dealers. A simple credit check on the owners is all that is needed for approval. Dealers should be prepared to provide their name, address, EIN, type of entity, and social security number. Should the dealer’s credit be acceptable, an approval happens in minutes and the bond can be printed online. Dealers seeking preferred rates and terms may be asked to complete a short application.
Generally, yes. Credit challenges can happen to anyone. Axcess Surety works with many major surety bond markets and can get approvals for almost any situation. Dealers with credit challenges should be ready to provide additional information and possibly pay higher rates.
All Illinois Motor Vehicle Dealer Bonds or its renewal must be in place continually as long as the dealer is in business. It cannot expire before December 31 in the year in which the dealer license was obtained or renewed. All Illinois Motor Vehicle Dealer Bonds expire on December 31, regardless of the date the bond was obtained because all Illinois dealer licenses expire on December 31. The bond cost is generally prorated to fit this date.
An Illinois Motor Vehicle Dealer Bond may be canceled by giving the Secretary of State 30-day notice. The cancellation should be delivered by certified mail. The surety will still remain liable for the claims that occurred while they were writing the bond and during the 30-day cancellation period.
Illinois motor vehicle dealers may also need other types of bonds such as Illinois Notary Bonds. Many of these other bonds can also be purchased instantly on the Illinois Surety Bond Page.
Illinois requires Motor Vehicle Dealers to be licensed and to obtain a Motor Vehicle Dealer Bond. Fortunately, these bonds are inexpensive and easy to obtain. The bond experts at Axcess Surety are ready to help with all your surety bond needs and answer any questions. Contact us today.
Obtain a free copy of an Illinois Motor Vehicle Dealer Bond Form by clicking on the image.
Axcess Surety is the premier provider of surety bonds nationally. We work individuals and businesses across the country to provide the best surety bond programs at the best price.
