Motor Vehicle Dealer Bond in Florida

What this bond requires in Florida

Under Fla. Stat. § 320.27(10), every motor vehicle dealer applicant must deliver a $25,000 surety bond or irrevocable letter of credit to FLHSMV before a license is issued, and the bond runs for the license period. Franchised dealer licenses expire December 31 each year, while independent and wholesale dealer licenses expire April 30, with dealers able to elect a 1-year or 2-year renewal cycle. The bond must be conditioned on the dealer complying with written sales contracts and not violating Chapter 319 or Chapter 320, and the surety's aggregate liability cannot exceed the bond amount in any one year. Any renewal, continuation, change, or newly issued bond must be filed with the department within 10 calendar days.

Who requires it

The motor vehicle dealer bond is required by the Florida Department of Highway Safety and Motor Vehicles (FLHSMV) under Fla. Stat. § 320.27(10).

How to file in Florida

The dealer applicant obtains a surety bond from a surety company authorized to do business in Florida (or an irrevocable letter of credit from a Florida-authorized bank) on FLHSMV Form 86020 (Motor Vehicle Dealer Surety Bond) or Form 86057 (Irrevocable Letter of Credit). The original signed and sealed bond is submitted to FLHSMV as part of the initial dealer license application package, and a new bond or continuation certificate must be on file at the start of each license period. Any renewal, change, or replacement bond must be filed with FLHSMV within 10 calendar days of issuance per Fla. Stat. § 320.27(10).

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FAQ

Common questions

Is a motor vehicle dealer bond required in Florida?

Yes. Florida requires motor vehicle dealer bonds issued by an admitted surety. The required amount is $25,000.

How much is the bond in Florida?

The bond amount is $25,000. Your annual premium is a small percentage of that, based on credit and experience.

Who requires the bond?

The bond is required by the Florida Department of Highway Safety and Motor Vehicles (FLHSMV).

How is the bond filed?

The dealer applicant obtains a surety bond from a surety company authorized to do business in Florida (or an irrevocable letter of credit from a Florida-authorized bank) on FLHSMV Form 86020 (Motor Vehicle Dealer Surety Bond) or Form 86057 (Irrevocable Letter of Credit). The original signed and sealed bond is submitted to FLHSMV as part of the initial dealer license application package, and a new bond or continuation certificate must be on file at the start of each license period. Any renewal, change, or replacement bond must be filed with FLHSMV within 10 calendar days of issuance per Fla. Stat. § 320.27(10).

What does the bond cover?

Surety bonds protect the obligee, not the principal. If you fail to meet the obligation the bond guarantees, the surety pays the claim and recovers from you.

Is a surety bond the same as insurance?

No. Insurance protects you. A surety bond protects whoever required the bond. You repay the surety for any claim they pay.