A New York City car wash bond is a surety bond required by the New York Department of Consumer Affairs during the car wash licensing process. The NYC car wash bond is required by the Department of Consumer Affairs to protect the public and, specifically, the car wash’s employees. The NYC car wash bond guarantees that the car wash owner will operate their business according to the Department of Consumer Affairs regulations, including paying employees, keeping a safe workplace, and complying with any other laws or regulations. The Department of Consumer Affairs requires car wash owners to provide a $150,000 bond for most car washes as part of the license issuance and renewal process. Our $150,000 NYC Car wash bond prices start at $1,500.
The cost of a New York City car wash bond is impacted by various factors, including the bonding company you choose, industry experience, and credit score. Out of these factors, your credit score has the most significant impact on the final price. The bond cost is a percentage of the total bonded amount, ranging from 1% to 20% of the required amount. Individuals with high credit scores can expect to pay around 1% of the bond amount, while those with lower credit scores may face a higher cost, potentially approaching 20% if approved for the bond. Our $150,000 New York car wash bonds start at $1,500.
The Department of Consumer Affairs allows a $30,000 car wash bond for certain car washes that have established wage agreements with their employees or the state. If there is a current collective bargaining agreement that specifies the timely payment of wages, a quick process for resolving disputes about nonpayment and underpayment of wages, or if there is an agreement with the state that allows for active monitoring of the business. In this agreement with the state, it must state that the business will pay at least the minimum wage, the business is subject to at least monthly monitoring by an independent monitor, and they provide a quick process for resolving disputes about wage violations.
If your car wash fits into one of these categories, you can send a copy of your agreement and additional documents with your bond to the Department of Consumer Affairs for their review.
There is no need to review your New York car wash bond! This bond is continuous and will not expire after a set period. Once the bond is purchased, it will remain in effect until it is canceled or terminated. While you don’t need to renew your bond, you will need to renew your license every 2 years, and as part of the renewal, you will need to show a new or continuous bond.
When a car wash owner fails to adhere to these regulations, employees may file a claim against the bond to recover their unpaid wages or any financial losses they've incurred. If the claim is deemed valid, the surety company will reimburse the affected employee or employees, providing compensation up to the bonded amount.
It's important to remember that surety claims differ from insurance claims because the car wash owner becomes obligated to repay the entire claim amount to the surety company. Given the potential financial burden and the risk of bond cancellation, it is always in the business's best interest to conduct its operations in strict accordance with industry regulations to minimize the likelihood of claims and settle any disputes with employees.
The city of New York requires the car wash bond to protect the public from unethical business practices. Specifically, it is meant to protect the employees who work for car washes, but it also serves three essential purposes:
Starting a car wash business in NYC requires a business owner to meet some requirements before they can apply for their license. These requirements aren’t hard but crucial to follow since only completed applications will be accepted.
A similar process will also apply for renewing your license, just without the need to gather new documents for your business since you’re already licensed and have most of these documents already. After the application is completed and sent for review, you’ll hear back from the NYC DCWP with your license and can start or continue your car wash business.
