Motor Vehicle Dealer Bond in New York

What this bond requires in New York

New York requires most motor vehicle dealers to file a surety bond with the DMV as a condition of registration under Vehicle and Traffic Law § 415(6-b). The bond amount is tiered: used-vehicle dealers who sold 50 or fewer vehicles in the prior year post $20,000, used-vehicle dealers who sold more than 50 post $100,000, and franchised new-car/SUV/light-truck dealers post $50,000. Dealers selling only trailers, motorcycles, vehicles over 10,000 pounds, ATVs, boats, or snowmobiles are exempt. The bond is conditioned on payment of valid bank drafts, transfer of good title, safekeeping of customer deposits, and payment of fines and overcharges.

Who requires it

The motor vehicle dealer bond is required by the New York State Department of Motor Vehicles under N.Y. Vehicle and Traffic Law § 415(6-b).

How to file in New York

Applicants submit the original sealed and signed Dealer Bond (Form VS-3, 'Dealer Bond Under New York State Vehicle and Traffic Law Section 415(6-b)') with power-of-attorney papers, made out to the exact business name and address shown on the Original Facility Application (VS-1), along with the rest of the dealer application package (sales tax certificate, workers' compensation proof, ID, fees, and DOS filing receipt) to the NY DMV in Albany. The bond must be issued by a surety company authorized to transact business in New York and must match the business name and mailing address on the facility application exactly. After DMV review, a regional office schedules an on-site facility inspection before issuing the registration certificate and dealer plates.

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Common questions

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