Motor Vehicle Dealer ($250,000) Bond - Statewide in Connecticut

Brief Summary

There is no $250,000 Connecticut dealer bond. C.G.S. 14-52(b)(2) sets $60,000 for a new car dealer's or used car dealer's license, $25,000 for a repairer, and $15,000 for a leasing or rental license issued under section 14-15 where vehicles go out for thirty days or more. The only path above $60,000 is subsection (c), where the commissioner reviews an applicant's financial resources and may grant the license on condition that a bond larger than the statutory minimum is posted. If a quote came back at $250,000, either the record is wrong or the commissioner set that amount for a specific applicant.

Connecticut requires each applicant for a new car dealer's or used car dealer's license to furnish a surety bond in the amount of $60,000. The bond is executed in the name of the State of Connecticut for the benefit of any aggrieved customer, on DMV form K-158, and its penalty is invoked only upon order of the Commissioner of Motor Vehicles after a hearing held in accordance with chapter 54.

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How to Apply for a Motor Vehicle Dealer ($250,000) Bond:

• Furnish a $60,000 surety bond for a new car dealer's or used car dealer's license
• Use DMV form K-158, the Surety Bond for Motor Vehicle Dealer, Repairer, Recycler or Leasing
• Execute the bond in the name of the State of Connecticut for the benefit of any aggrieved customer
• Be prepared to provide financial information if the commissioner requests it, since a larger bond may be a condition of licensure
• Pay the license fee, $700 for a new motor vehicle dealer or $560 for a used motor vehicle dealer
• File the biennial renewal with the fee before the license expires, since a licensee that misses the date must cease to engage in business
• File proof of bond renewal or replacement on or before the existing bond expires to avoid the $200 administrative fee
• Do not let a license sit expired more than forty-five days, because the commissioner cannot renew it after that

Detailed Information About the Connecticut Motor Vehicle Dealer ($250,000) Bond:

The amounts in the statute

• New car dealer or used car dealer: $60,000
• Repairer: $25,000
• Leasing or rental license under section 14-15, for rentals of thirty days or more: $15,000

DMV form K-158, the Surety Bond for Motor Vehicle Dealer, Repairer, Recycler or Leasing, lists the same figures, with repairer, recycler and low speed vehicle at $25,000 and leasing or rental at $15,000. Nothing in the section tiers by units sold, revenue or number of locations.

Where a bigger number can come from

Subsection (c). The commissioner may request financial information from an applicant for a repairer's license or a used car dealer's license, review whether the applicant has sufficient financial resources to conduct the business consistent with the reasonable security and protection of its customers, refuse the license if information is not provided or the financial status is unsatisfactory, and in any case deemed appropriate grant the license on condition that the applicant post a bond in an amount prescribed by the commissioner greater than the statutory minimum. An applicant aggrieved by that decision is entitled to a hearing under chapter 54. So a figure above $60,000 is possible, but it is applicant specific rather than a published tier.

What the bond covers, and who counts as a customer

The bond is conditioned on complying with any state or federal law or regulation relating to the conduct of the business, and it indemnifies any loss sustained by a customer from acts of the licensee that are grounds for suspension or revocation, or from the licensee going out of business. The penalty is not invoked except on order of the commissioner after a hearing under chapter 54.

The definition of customer is narrower than most people assume. It does not include a person, firm or corporation that finances a licensed dealer's motor vehicle inventory, and it does not include another licensed dealer, acting as a dealer, buying from or selling to the licensee. Floor plan lenders and dealer trades are outside the bond.

Renewal, and the fees for getting it wrong

Licenses renew biennially on staggered schedules set by the commissioner. Not less than forty-five days before expiration the commissioner sends a renewal application. A licensee that has not filed the renewal with the fee before expiration shall cease to engage in business. A renewal filed after expiration carries a $100 late fee, and the commissioner shall not renew a license that has been expired for more than forty-five days.

On the bond itself, subsection (b)(5) directs the commissioner to assess a $200 administrative fee against any licensee that fails to provide proof of bond renewal or replacement on or before the expiration date of the existing bond, on top of suspension or revocation and the civil penalties under section 14-64.

License fees

$700 for a new motor vehicle dealer, $560 for a used motor vehicle dealer, and $340 for a repairer, payable to the Commissioner of Motor Vehicles, with prorating possible where the staggered system shifts an expiration date.

The bond keeps the license alive. It does not bring anyone through the door. Any licensed dealer can also claim a free listing at BestAutoDealerIn.com, a directory searchable by zip code and state, with a backlink that helps your own SEO, sends referrals, and gets a blog post written about your dealership.

Eligibility and Requirements for a Connecticut Motor Vehicle Dealer ($250,000) Bond:

• Bond amount of $60,000 for a new car dealer or used car dealer license
• State of Connecticut as obligee, for the benefit of any aggrieved customer
• Bond conditioned on compliance with state and federal law relating to the conduct of the business
• Penalty invoked only upon order of the commissioner after a hearing under chapter 54
• Business name on the bond matching the license application exactly
• Credit review of the owners, which shapes the rate rather than eligibility for most applicants at this bond size

Connecticut Motor Vehicle Dealer ($250,000) Bond FAQs:

Official and Additional Resources for the Connecticut Motor Vehicle Dealer ($250,000) Bond: