Motor Vehicle Dealer ($60,000) Bond - Statewide in Connecticut

Brief Summary

$60,000 is the dealer figure, and only the dealer figure. A repairer's license is a $25,000 bond and a leasing or rental license under section 14-15 is $15,000, so the first thing to settle is which license you are actually applying for. Worth knowing before you file: Connecticut does not let a claimant simply demand on this bond. It is invoked only on order of the commissioner after a hearing, and financing entities and licensed dealers in inter dealer transactions are not customers for this purpose.

Conn. Gen. Stat. 14-52 requires each applicant for a new car dealer's or used car dealer's license to furnish a surety bond in the amount of sixty thousand dollars. A repairer's license carries a twenty-five thousand dollar bond and a leasing or rental license issued under section 14-15 carries fifteen thousand dollars. The bond is executed in the name of the state of Connecticut for the benefit of any aggrieved customer, conditioned on the applicant or licensee complying with any state or federal law or regulation relating to the conduct of the business, and provided as indemnity for any loss sustained by a customer by reason of acts constituting grounds for suspension or revocation of the license or the licensee going out of business.

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How to Apply for a Motor Vehicle Dealer ($60,000) Bond:

• Confirm the license class first. New car dealer and used car dealer are $60,000. A repairer's license is $25,000. A leasing or rental license under section 14-15 is $15,000 on Form K-158.
• Legal business name exactly as it will appear on the DMV license application.
• Owner or officer information for the underwriting and credit review.
• Complete the bond application and review the quoted premium.
• Receive the executed $60,000 bond, executed in the name of the state of Connecticut for the benefit of any aggrieved customer.
• File it with the dealership and repair shop license application and the $140 application fee, plus the two year license fee for your license type, which the DMV lists in a range of $340 to $700.
• Work through the rest of the K-36 procedure for a Connecticut automotive dealer's or repairer's license, since the bond is one item in that packet rather than the whole of it.
• Keep the bond in force for the full two year license period and renew it alongside the biennial license renewal.

Detailed Information About the Connecticut Motor Vehicle Dealer ($60,000) Bond:

Three amounts, and the license class decides

Section 14-52 sets them out plainly:

• New car dealer or used car dealer: $60,000
• Repairer: $25,000
• Leasing or rental license issued under section 14-15: $15,000

The DMV lists the leasing bond on Form K-158 and notes it applies to leases and rentals of thirty days or more.

So a shop that sells and also repairs is looking at the dealer figure for the dealer license, not an averaged number, and a leasing company is not writing a $60,000 bond because somebody quoted the dealer amount.

Who the bond runs to, and who is not a customer

Each bond is executed in the name of the state of Connecticut for the benefit of any aggrieved customer. It is conditioned on the applicant or licensee complying with the provisions of any state or federal law or regulation relating to the conduct of the business, and it stands as indemnity for any loss sustained by a customer by reason of acts of the licensee constituting grounds for suspension or revocation of the license, or by reason of the licensee going out of business.

That going out of business language matters. A deposit taken on a car that never gets delivered because the store closes is squarely inside what this bond is for.

The statute also narrows who can reach it. Financing entities are excluded from the definition of customer, and so are licensed dealers in inter dealer transactions. A floor plan lender or another dealer on a wholesale deal gone bad is not an aggrieved customer under 14-52.

It is not a demand bond

This is the procedural fact almost nobody puts on a page. The penalty may only be invoked upon order of the commissioner after a hearing held before the commissioner in accordance with the provisions of chapter 54, the Uniform Administrative Procedure Act.

A claimant does not send a letter to the surety and get paid. The Department of Motor Vehicles has to hold a hearing and order it. That changes how a claim actually plays out and it is worth knowing before you assume the bond is a fast consumer remedy.

Fees and the two year cycle

The DMV lists a $140 application fee for the dealership and repair shop license, with two year license fees ranging from $340 to $700 depending on the license type. Renewal is biennial.

Other DMV regulated business licenses run on their own numbers. An auto club posts a $10,000 surety bond on Form E-140 and pays $500. A leasing company pays $300 for a new license and $300 for a two year renewal. A manufacturer license is $2,300 for two years. A recycler pays a $280 examination fee and a $705 license fee.

Because the license runs on a two year cycle while the bond runs on its own anniversary, keep the two dates tracked separately. The bond has to be in place for the whole license period, not just on the day you applied.

The bond is not the whole application

Form K-36 is the DMV's procedure document for obtaining a Connecticut automotive dealer's or repairer's license, and the bond is one item in it. Location, zoning approval and the rest of the packet are separate. Posting the bond does not move any of them, and satisfying them does not remove the bond.

One free thing worth doing

Once the license is issued, list the dealership on BestAutoDealerIn.com. It is free for any auto dealer, buyers search it by ZIP code and state, the listing carries a backlink that helps your own site rank, it sends referrals, and we write blog posts on listed dealerships.

Eligibility and Requirements for a Connecticut Motor Vehicle Dealer ($60,000) Bond:

• A surety bond in the amount of $60,000 for a new car dealer's or used car dealer's license.
• Executed in the name of the state of Connecticut for the benefit of any aggrieved customer.
• Conditioned on the applicant or licensee complying with the provisions of any state or federal law or regulation relating to the conduct of the business.
• Standing as indemnity for any loss sustained by a customer by reason of acts of the licensee constituting grounds for suspension or revocation of the license, or the licensee going out of business.
• Invoked only upon order of the commissioner after a hearing held in accordance with chapter 54.
• Business name on the bond matching the license application exactly.
• Owner credit review. At $60,000 credit and the dealership's financial condition shape both the rate and, for a weak file, the terms.

Connecticut Motor Vehicle Dealer ($60,000) Bond FAQs:

Official and Additional Resources for the Connecticut Motor Vehicle Dealer ($60,000) Bond: