Ohio Motor Vehicle Dealer Bond
A $25,000 Ohio Motor Vehicle Dealer bond must accompany a dealership license application as a condition of licensing in Ohio. All individuals or business entities who sell or deal in 5 or more used motor vehicles in a 12-month period either directly or indirectly must provide a dealer bond. The bond will be on file with the Ohio Bureau of Motor Vehicles and the Ohio Secretary of State before a license will be granted to an eligible applicant. The Ohio Motor Vehicle Dealer Bond must be maintained for the duration of licensure. There is very limited exception to the law requirements and any exception can be found in this rule 4501:1-3-11.
The following is the exact text taken from dealer licensing section of Ohio.gov.
“A used motor vehicle dealer, as required in section 4501:1-3-11 of the Ohio Administrative Code (OAC), shall post with the Attorney General’s Office in favor of this state, a surety bond in the amount of twenty five thousand dollars ($25,000).
The surety bond is used solely for the purpose of replenishing funds that have been distributed from the Title Defect Rescission (TDR) fund to compensate retail purchasers of the said dealership.
No license will be issued if a surety bond has not been secured meeting the requirements below. Proof that a surety bond has been secured must be submitted with the application.
The surety bond requirements:
- The bond needs to include the registered business name of the dealership, as filed with the Bureau of Motor Vehicles and Secretary of State;
- The bond must be posted to the Attorney General’s Office in the amount of $25,000;
- The bond must be retained for the entire duration of the license; and
- The Registrar must be notified no less than 30 days of cancellation of the bond.
The original bond MUST be sent to the Attorney General’s Office (address below) before the license may be issued. The original bond will be retained by the Attorney General’s Office and will not be returned. Any changes to the surety bond, notifications of renewal, or cancellations MUST be reported to the Attorney General’s Office.
Any used motor vehicle dealer that fails to retain a valid bond at any time during the duration of the license, will be immediately referred to the Motor Vehicle Dealers Board for possible suspension or revocation of the license.
Those who are exempt from retaining a bond for a used motor dealer’s license:
- Any new motor vehicle dealer who also holds a used motor vehicle dealers license; or
- Any used motor vehicle dealer that held a license prior to the effective date of section 4501:1-3-11 of the OAC (Ohio Administrative Code).”
Here is a link to the relevant Ohio dealer licensing resources at Ohio. gov.
Insurance Associates Insurance Agency is able to offer the Ohio Motor Vehicle Dealer Bonds through CNA and their Western Surety Company affiliate. The bond is underwritten and the applicant must qualify. If qualified for the bond, the annual fee for the Ohio Motor Vehicle Dealer Bond is $250 (as of 11/12/2021). The fee for the dealer bond can change without notice. A bond application is required and can be done online with the agent and the bond issued without visiting the office. To issue the bond, the dealer bond does require immediate payment in full and credit cards can be used with the carrier. The dealer applicant must sign the bond before submitting to the Dealer Licensing office in Ohio. An original bond is provided to the prospective dealer upon acceptance and issuance. Terry McCarthy maintains his office at 8114 Paul Manors Dr Ste 200, West Chester, OH 45069. He accepts office appointments and maintains social distancing to protect the applicant during this COVID era.
Successful applicants who obtain an Ohio used vehicle dealer license have taken a few steps with the agency to obtaining insurance for operation of their dealership. Used Car Dealer Insurance is another product offered by the agency and Terry McCarthy. Terry represents a number of carriers who can provide your new business with insurance for liability and the inventory you maintain.