Motor Vehicle Dealer Bond in Pennsylvania

What this bond requires in Pennsylvania

Pennsylvania splits dealer bonding between two authorities. The State Board of Vehicle Manufacturers, Dealers and Salespersons (Department of State) issues the dealer license under the Board of Vehicles Act, while the $20,000 dealer/manufacturer surety bond is required by PennDOT under 75 Pa.C.S. § 1335 as a condition of receiving dealer registration plates. Farm equipment dealers, mobile home dealers/manufacturers, and modular housing manufacturers are statutorily exempt from the bond. Dealers who also act as a PennDOT full agent must additionally post a $30,000 bond per location.

Who requires it

The motor vehicle dealer bond is required by the Pennsylvania State Board of Vehicle Manufacturers, Dealers and Salespersons (Department of State, Bureau of Professional and Occupational Affairs) under 75 Pa.C.S. § 1335 (bond); Board of Vehicles Act, 63 P.S. §§ 818.1-818.37 (licensure).

How to file in Pennsylvania

Apply for the dealer license through the Pennsylvania Licensing System (PALS) at www.pals.pa.gov, administered by the State Board of Vehicle Manufacturers, Dealers and Salespersons. The original $20,000 surety bond, executed in the name of the Commonwealth of Pennsylvania, must be filed with PennDOT Bureau of Motor Vehicles to obtain dealer registration plates; copies are not accepted. Dealers who will issue temporary registration cards and plates as a full agent submit PennDOT Form MV-375 with a $30,000 bond per physical business location.

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FAQ

Common questions

Is a motor vehicle dealer bond required in Pennsylvania?

Yes. Pennsylvania requires motor vehicle dealer bonds issued by an admitted surety. The required amount is $20,000 to $30,000.

How much is the bond in Pennsylvania?

The bond amount is $20,000 to $30,000. Your annual premium is a small percentage of that, based on credit and experience.

Who requires the bond?

The bond is required by the Pennsylvania State Board of Vehicle Manufacturers, Dealers and Salespersons (Department of State, Bureau of Professional and Occupational Affairs).

How is the bond filed?

Apply for the dealer license through the Pennsylvania Licensing System (PALS) at www.pals.pa.gov, administered by the State Board of Vehicle Manufacturers, Dealers and Salespersons. The original $20,000 surety bond, executed in the name of the Commonwealth of Pennsylvania, must be filed with PennDOT Bureau of Motor Vehicles to obtain dealer registration plates; copies are not accepted. Dealers who will issue temporary registration cards and plates as a full agent submit PennDOT Form MV-375 with a $30,000 bond per physical business location.

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.