Connecticut Auto Dealer Bond

As “The Constitution State”, Connecticut is a state with a strong economy supported by financial services. It is the 6th richest state by GDP capita. As the home to 400 private funds, the state boasts a lot of wealthy people ready to purchase expensive cars. Being a motor vehicle dealer in Connecticut is an incredibly profitable feat. However, you need a motor vehicle dealer bond and a license to sell vehicles. 

Connecticut Statutes Chapter 246 Sec. 14-52. states that no person, firm or corporation can buy, sell, offer for sale, broker, or repair any motor vehicle without a proper license. In addition, to obtain this license, a bond is required. 

Overview

  • Who Needs It: any individual or business hoping to work with vehicles for profit 
  • Bond Amount: $60,000 for motor vehicle dealer, $25,00 for general repairer, $15,000 for leasing or rental company, and $10,000 for limited repairer 
  • Price: starts at $100, varies depending on the type of bond needed and applicant credit score
Example Connecticut Auto Dealer Bond Form
Example Connecticut Auto Dealer Bond Form
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Connecticut Auto Dealer Bond FAQs

What Bond Do I Need?

There are multiple classifications of licenses for the state of Connecticut. 

Motor Vehicle Dealer Bond

  • Sells new or used vehicles
  • $60,000 bond amount

General Repairer Bond

  • Offer all repairs, including assembling or disassembling a vehicle
  • $25,000 bond amount

Leasing and Rental Company Bond

  • Offer vehicles for rent
  • $15,000 bond amount

Limited Repairer Bond

  • Offer only minor repairs, i.e., cooling, electrical
  • $10,000 bond amount 

I Only Sell A Few Cars A Year, Why Do I Need the Bond? 

No matter how many cars you sell, as long as you deal with cars for anything other than for your own non-profit related reasons, you need a bond and a license. According to the Connecticut Department of Motor Vehicles, it’s illegal to repair or sell motor vehicles to consumer without a Connecticut dealer license is 

The bond is created to provide financial compensation to the customer of the bonded dealer for any loss suffered by the customer due to actions of the bonded dealer. Note that the customer could include anyone that is engaged in the business of the bonded dealer, including those who finance the inventories for the dealers.

What Is the Consequence of a Claim on my Bond

A claim on the bond is generally because the bonded dealer violates certain laws and regulations by the Connecticut Department of Motor Vehicles, outlined in Chapter 54 of the Connecticut General Statutes. Note that the payout of the claim won’t be made until a hearing is held with the Commissioner of Motor Vehicles in accordance with the provisions of Chapter 54. If the hearing concludes with the claim being valid, a payout would be made to the party that filed the claim. Then, the surety company will go after the bonded dealer to recoup the claim loss amount. This is because different from insurance, surety company will need to be restituted of the full claim amount. In other words, the bonded dealer whose irresponsible actions caused the claims and therefore the bonded dealer needs to reimburse the surety the entire claim amount. 

However, claim can be avoided. The most common causes of claims result from the following actions:

  • Selling cars with a lien on them
  • Selling cars without prior disclosure of damages to the cars
  • Not paying all appropriate licensing fees and taxes 

Please ensure that you avoid the actions listed below and comply with all motor vehicle dealer regulations. You won’t face the claim in your auto dealer career. 

What Information Do I Need to Provide on the Bond? 

The official name for the Connecticut motor vehicle dealer bond is the following on the top left corner of the bond.

SURETY BOND - MOTOR VEHICLE 
DEALER REPAIRER/LIMITED REPAIRER, OR LEASING/RENTING CO.
K-158 REV. 9-22

On the bond form, you would ensure the following fields are filled out by the surety companies 

  • The right dealer bond is checked for the license type you are applying for
  • The surety bond number is filled out on the top right
  • If the licensee has an existing license, make sure the license number is on the bond form
  • The surety company name address and state of incorporation
  • Name and signature of surety attorney in fact
  • Name and signature of first witness of surety and second witness of surety

After making sure those information above are filled out by the surety companies, you also need to make sure you fill out and print and sign your name. 

How Do I File My Bond? 

The original bond and the power of attorney must be mailed to the following address

DMV - Dealers & Repairers
Unit 60 State St, Room 102A
Wethersfield, CT 06161

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