Motor Vehicle Dealer Bond in Oregon

What this bond requires in Oregon

Per ORS 822.030, vehicle dealers must file a corporate surety bond (or irrevocable letter of credit) executed to the State of Oregon in the penal sum of $50,000 per year, reduced to $10,000 for dealers exclusively in motorcycles, mopeds, Class I ATVs, or snowmobiles. The maximum payable to non-retail-customer claimants is capped at $10,000. A dealer may not conduct business during any period not covered by a continuous bond and required liability insurance. Surety must notify ODOT of any cancellation, and the surety remains liable until DMV receives that notice.

Who requires it

The motor vehicle dealer bond is required by the Oregon Department of Transportation, Driver and Motor Vehicle Services Division (DMV) - Business Regulation under ORS § 822.020; ORS § 822.030.

How to file in Oregon

Applicants complete the Application for Three Year Vehicle Dealer Certificate (Form 735-370 packet), complete the required 8 hours of pre-licensing education from a DMV-approved provider, obtain liability insurance, obtain local zoning/business compliance certification, and have their surety company complete and seal the DMV Surety Bond form (735-522B). The completed application packet, with the original bond filed directly with DMV, is submitted by mail or in person at DMV Headquarters Business Licensing window in Salem; processing takes 2-3 weeks and no dealer activity may occur until the certificate is issued.

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FAQ

Common questions

Is a motor vehicle dealer bond required in Oregon?

Yes. Oregon requires motor vehicle dealer bonds issued by an admitted surety. The required amount is $10,000 to $50,000.

How much is the bond in Oregon?

The bond amount is $10,000 to $50,000. Your annual premium is a small percentage of that, based on credit and experience.

Who requires the bond?

The bond is required by the Oregon Department of Transportation, Driver and Motor Vehicle Services Division (DMV) - Business Regulation.

How is the bond filed?

Applicants complete the Application for Three Year Vehicle Dealer Certificate (Form 735-370 packet), complete the required 8 hours of pre-licensing education from a DMV-approved provider, obtain liability insurance, obtain local zoning/business compliance certification, and have their surety company complete and seal the DMV Surety Bond form (735-522B). The completed application packet, with the original bond filed directly with DMV, is submitted by mail or in person at DMV Headquarters Business Licensing window in Salem; processing takes 2-3 weeks and no dealer activity may occur until the certificate is issued.

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.