Salvage Dealer ($25,000) Bond - Statewide in Florida

Brief Summary

Salvage dealers get a break on garage liability insurance in Florida, but not on the bond. The $25,000 dealer bond still has to be on file with FLHSMV before your license issues, and we write it on the state's HSMV 86020 form so it drops right into the dealer license packet.

Florida licenses salvage motor vehicle dealers under Fla. Stat. 320.27 as one class of motor vehicle dealer. Before any dealer license issues, and every year after, the applicant must deliver a $25,000 surety bond or irrevocable letter of credit to the Department of Highway Safety and Motor Vehicles. The bond protects anyone in a retail or wholesale transaction who suffers a loss from the dealer's violation of Chapters 319 or 320.

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How to Apply for a Salvage Dealer ($25,000) Bond:

• Complete FLHSMV form HSMV 86056, the application for dealer license.
• Provide your FEIN, proof of business registration and sales tax documentation.
• Complete the bond application with owner and business details for underwriting.
• Receive the executed $25,000 bond on form HSMV 86020.
• Submit the original bond with the application and the $300 initial fee.
• File a bond each year before the license renews, using HSMV 86720 for renewal.

Detailed Information About the Florida Salvage Dealer ($25,000) Bond:

Who counts as a salvage dealer

Florida Statute 320.27(1)(c)5 defines a salvage motor vehicle dealer as any person who engages in the business of acquiring salvaged or wrecked motor vehicles for the purpose of reselling them and their parts. That is a dealer license class, issued by FLHSMV, and it carries the same bond rule as the other dealer classes.

The insurance exemption is not a bond exemption

Section 320.27(3) exempts salvage dealers from garage liability insurance and personal injury protection insurance on vehicles that cannot be legally operated on roads, highways or streets. Applicants sometimes assume the bond falls away with it. It does not. Section 320.27(10)(a) requires a $25,000 surety bond or irrevocable letter of credit annually, before any license is issued.

What the bond covers

The bond runs to the department in favor of any person in a retail or wholesale transaction who suffers a loss from a violation. FLHSMV form HSMV 86020 names the Director of the Division of Motorist Services as obligee and conditions the bond on compliance with written contracts and with Chapters 319 and 320. The surety can end its liability with written notice by registered mail, effective 30 days after service.

Fees and forms

The initial dealer license fee is $300. Renewal is $75 for one year or $150 for two. The application is HSMV 86056 and renewals use HSMV 86720. A dealer posting a letter of credit instead of a bond uses HSMV 86057. FLHSMV also points salvage dealers to section 319.30 for NMVTIS notification on derelict and salvage vehicles.

Eligibility and Requirements for a Florida Salvage Dealer ($25,000) Bond:

• Bond amount of $25,000 under Fla. Stat. 320.27(10)(a).
• Obligee: Director of the Division of Motorist Services, State of Florida.
• Irrevocable letter of credit on HSMV 86057 accepted in place of a surety bond.
• Surety cancellation requires written notice by registered mail, effective after 30 days.
• Garage liability and PIP insurance not required on vehicles that cannot be legally operated, but the bond still is.
• NMVTIS notification duties for derelict and salvage vehicles under Fla. Stat. 319.30.

Florida Salvage Dealer ($25,000) Bond FAQs:

Official and Additional Resources for the Florida Salvage Dealer ($25,000) Bond: