Motor Vehicle Leasing or Rental Company ($15,000) Bond - Statewide in Connecticut

Brief Summary

If your Connecticut leasing or rental business writes agreements of 30 days or more, the DMV will not issue your license without a $15,000 surety bond on Form K-158. You pay a premium for the bond instead of tying up $15,000 in cash, and the executed form goes straight into your K-7 application package.

Connecticut General Statutes 14-52 requires a $15,000 surety bond from every applicant for a leasing or rental license under section 14-15 who leases or rents motor vehicles for periods of thirty days or more. The bond is written on DMV Form K-158 in the name of the State of Connecticut for the benefit of aggrieved customers, and it is filed with the Department of Motor Vehicles along with the license application and the $300 fee.

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How to Apply for a Motor Vehicle Leasing or Rental Company ($15,000) Bond:

• Confirm whether you lease or rent vehicles for periods of 30 days or more. That is what triggers the $15,000 bond.
• Have the business name and address exactly as they will appear on DMV Form K-7.
• Owner or principal name, home address and Social Security number for the credit review.
• Complete the bond application and review the quoted premium.
• Pay the premium and receive the executed $15,000 bond on Form K-158, with the surety's current power of attorney attached.
• File the bond with the K-7 application, Form K-198, proof of financial responsibility on Form R1325e, a Connecticut sales tax number, a copy of one driver's license and the $300 fee.

Detailed Information About the Connecticut Motor Vehicle Leasing or Rental Company ($15,000) Bond:

The bond depends on how long your agreements run

The most common mistake on this license is assuming every rental company posts the same bond. Section 14-52 ties the $15,000 bond to applicants engaged in leasing or renting motor vehicles for periods of thirty days or more. The DMV license page says the same thing: the K-158 bond is required only for leasing or renting for 30 days or more. A company that rents only on shorter terms still needs the section 14-15 license, but the bond requirement is written around the longer terms.

Who needs the license at all

Section 14-15 requires any person, firm or corporation to apply to the Commissioner of Motor Vehicles before going into the business of leasing or renting motor vehicles. There is a narrow exemption for a business that leases or rents driverless vehicles only as an incidental part of its principal business, and only to a party whose principal business is the same as the lessor's.

What the bond covers

Form K-158 is the same form Connecticut uses for dealers, repairers and recyclers, with the leasing or rental box checked at $15,000. The bond runs to the State of Connecticut for the benefit of any aggrieved party. It is conditioned on the licensee complying with state and federal law in conducting the business, and it indemnifies customers for losses caused by acts that are grounds for suspension or revocation, or by the licensee going out of business. Only the Commissioner of Motor Vehicles can invoke the bond, and only after a hearing. Aggregate liability cannot exceed the $15,000 penal amount.

The bond is not your insurance filing

The DMV also requires proof of financial responsibility on Form R1325e, which the DMV does not supply. That is a separate filing from the surety bond. One does not substitute for the other.

Fees and renewal

The license fee is $300 for a new license and $300 for each two-year renewal, with a $100 late fee. Section 14-15 provides for biennial renewal on a staggered schedule, and the commissioner will not renew a license that has been expired for more than 45 days.

Eligibility and Requirements for a Connecticut Motor Vehicle Leasing or Rental Company ($15,000) Bond:

• Bond amount of $15,000 for leasing or renting motor vehicles for periods of 30 days or more.
• DMV Form K-158, executed in the name of the State of Connecticut for the benefit of any aggrieved party.
• Principal and surety signatures each witnessed by two witnesses.
• Business name and address on the bond matching the K-7 application exactly.
• A separate proof of financial responsibility on Form R1325e.
• Owner credit review. Credit shapes the premium rate.

Connecticut Motor Vehicle Leasing or Rental Company ($15,000) Bond FAQs:

Official and Additional Resources for the Connecticut Motor Vehicle Leasing or Rental Company ($15,000) Bond: