Surety Bond Encyclopedia

Motor Vehicle Dealer ($75,000) Bond - Statewide in Utah

Brief Summary

Every Utah dealer license expires June 30 and the fee is not prorated, so a bond bought in the spring carries you only to the end of June. Ask for the bond on form TC-450 with the right surety rating, file it with the Motor Vehicle Enforcement Division, and the license can issue.

Utah Code 41-3-205 requires a $75,000 corporate surety bond before a new or used motor vehicle dealer license is issued. The same figure applies to large trailer and special equipment dealers. Motorcycle, off highway vehicle and small trailer dealers post $10,000 instead. The bond is filed with the administrator of the Motor Vehicle Enforcement Division on form TC-450 and must come from a surety licensed in Utah with an A.M. Best rating of at least B+.

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How to Apply for a Motor Vehicle Dealer ($75,000) Bond:

Confirm the license type, since a motor vehicle dealer posts $75,000 and a motorcycle or small trailer dealer posts $10,000.
Have every owner, partner, corporate officer or member complete the eight hour training seminar.
Submit fingerprint cards with the $30 fee for each owner, partner or officer.
Obtain the $75,000 bond on form TC-450, signed by the principal and notarized, with the surety's affidavit of qualification.
File form TC-301, the bond and the $127 dealer license fee with the Motor Vehicle Enforcement Division.
Show a permanent office, a sign of at least 24 square feet and display space for at least three vehicles.

Detailed Information About the Utah Motor Vehicle Dealer ($75,000) Bond:

Which amount is yours

Utah does not set dealer bonds by sales volume. The amount follows the license type under Utah Code 41-3-205.

New or used motor vehicle dealer, or large trailer dealer: $75,000
Special equipment dealer: $75,000
Motorcycle, off highway vehicle or small trailer dealer, or crusher: $10,000
Body shop: $20,000

This page covers the $75,000 motor vehicle dealer bond.

The surety has to qualify too

The statute requires a corporate surety licensed to do business in Utah with an A.M. Best rating of at least B+. The bond must be continuous in form and approved by the attorney general. The prescribed form is TC-450, Bond of Motor Vehicle Dealer, Crusher or Body Shop, which runs to the people of the State of Utah and must be notarized.

What a claim looks like

The bond is conditioned on the dealer doing business without fraud, without fraudulent representation, and without violating Utah Code 41-3-301(1) or 41-3-402(1). A claimant must file in writing with the administrator within one year after the cause of action arose and start an action within two years after filing the claim. No payment is made until six months after the first claim is filed, and if claims exceed the bond they are paid pro rata.

Who does not file a separate bond

A representative or consignee of a dealer does not have to file a bond if the dealer they act for fully complies with the chapter.

Training does not replace the bond

Each owner, partner, corporate officer or member must attend an eight hour training seminar and submit fingerprints. Both are separate from the bond, and all three are needed. A surety cancelling the bond must give the administrator 60 days notice under the TC-450 form.

Eligibility and Requirements for a Utah Motor Vehicle Dealer ($75,000) Bond:

Corporate surety licensed in Utah with an A.M. Best rating of B+ or better.
Bond continuous in form and approved by the attorney general.
Bond amount of $75,000 for a new or used motor vehicle dealer license.
License renewed every year, since all MVED licenses expire June 30.
Sales tax registration on form TC-69.

Utah Motor Vehicle Dealer ($75,000) Bond FAQs:

Is the bond different for new and used dealers?

No. Utah Code 41-3-205 and the MVED license page set $75,000 for new or used motor vehicle dealers and large trailer dealers alike. Only motorcycle, off highway vehicle and small trailer dealers drop to $10,000.

Can any bonding company write it?

The surety must be licensed to do business in Utah and hold an A.M. Best rating of at least B+. A bond from a lower rated or unlicensed company does not satisfy the statute.

When does my license expire?

Every license MVED issues expires on June 30, and licenses are not prorated. A dealer licensed in May still renews at the end of June.

We completed the eight hour dealer training. Is the bond still required?

Yes. The seminar, the fingerprints and the bond are separate requirements. Finishing the training does not waive any part of the bond.

How long does a customer have to make a claim?

The claim must be filed in writing with the administrator within one year after the cause of action arose, and the lawsuit must start within two years after the claim was filed. Nothing is paid until six months after the first claim.