For new and used vehicle dealers

Your Dealer Bond Should Cost Hundreds. Brokers Quote Thousands.

Every state requires a surety bond A three-party agreement where a surety company guarantees to an obligee that a principal will fulfill their obligations. If the principal fails, the surety pays the claim and seeks reimbursement from the principal. before it issues a dealer license. Brokers mark yours up 20 to 40 percent and call it a service. We show you the required amount, the statute behind it, and the Premium The annual cost you pay for a surety bond, typically 1–15% of the total bond amount. Your rate depends on credit score, financials, and bond type. range your credit actually earns. Free, no email gate.

50

States covered with statute citations

$10K-$100K

Bond amounts, state by state

0.5-10 %

What premiums actually run

20-40 %

Typical broker commission built into your rate

$2.8B

Estimated annual broker fees in the U.S. surety market

That is money dealers pay for introductions, not for bond coverage.

The Problem

The Bond Industry Has a Middleman Problem

Most dealers buy their bond through brokers The percentage of your premium that goes to the bond broker or agent, typically 20–30%. This is built into your rate — you're already paying it. who add cost without adding value. Here is what they do not want you to know.

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Commissions Are Built In

A $50,000 Texas dealer bond with good credit is a $250 to $500 premium. Quoted at $900? The difference is not risk. It is commission, and it is already inside the number you were given.
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Information Is Gatekept

Your state publishes the bond amount in statute. It is public. A broker who will not tell you the figure until you hand over your phone number is not protecting anything except their own position in the deal.
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The Process Is Simpler Than They Say

You fill out an application, an underwriter The process a surety uses to evaluate your risk — reviewing credit, financials, experience, and work history to determine your premium rate. reviews your credit, the surety issues the bond on your state's form, and you file it with your license application. That is the whole process.
Follow the Money

Where Your Premium Actually Goes

An $800 premium on a $25,000 used dealer bond. Here is where that money ends up when it goes through a broker.

45% Surety
30% Broker
15% Sub-Agent
10% Fees
Surety Company

$360

on an $800 premium

Broker Commission

$240

on an $800 premium

Subagent Cut

$120

on an $800 premium

Processing Fees

$80

on an $800 premium

By State

Dealer bond requirements by state

See all 50 states →

The amount below is what your state requires by statute. It is not what you pay. Your premium is a percentage of it, set by your credit.

The Process

How Bonding Actually Works

The bonding process is not a mystery. Here are the three core steps, no broker required.

Your State Requires a Bond

Step 1
You apply for a dealer license. The DMV or motor vehicle commission says you need a surety bond A three-party agreement where a surety company guarantees to an obligee that a principal will fulfill their obligations. If the principal fails, the surety pays the claim and seeks reimbursement from the principal. filed before it will issue that license. They are the Obligee The party that requires the bond — typically a government agency, project owner, or regulatory body that needs financial protection. , and the amount is set by statute, not by them.

You Apply with a Surety

Step 2
You fill out an application with a surety company The insurance company or surety company that issues the bond and guarantees payment to the obligee if the principal defaults. . They review your credit, finances, and experience through a process called Underwriting The process a surety uses to evaluate your risk — reviewing credit, financials, experience, and work history to determine your premium rate. . This determines your approval and Premium The annual cost you pay for a surety bond, typically 1–15% of the total bond amount. Your rate depends on credit score, financials, and bond type. rate.

You Get Bonded

Step 3
If approved, you pay your premium and sign an Indemnity Agreement A legal contract where the principal (and often their spouse or business partners) agrees to repay the surety for any claims paid out on the bond. . The surety issues your bond on the state's form. You are now the Principal The person or business that purchases the surety bond and is required to fulfill the obligation it guarantees. , the party the bond guarantees.
When your broker buys you a steak dinner, remember — you already paid for it. It came out of your premium.

— The NoBro Bonds Perspective

Resources

Learn on Your Own Terms

Know your number before anyone quotes you

The bond amount is set by statute. The premium is set by your credit. Neither is set by whoever answers the phone first.

Calculate your bond cost

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State guides

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Calculator

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Glossary terms

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