Motor Vehicle Dealer Bond in Rhode Island

What this bond requires in Rhode Island

Rhode Island requires a $50,000 surety bond for all motor vehicle dealers and motorcycle/moped dealers per 280-RICR-30-20-1, promulgated under RIGL §§ 31-5-2 and 31-5.1-3. The bond is filed annually with the dealer license renewal and remains in effect until December 31 of the licensing year.

Who requires it

The motor vehicle dealer bond is required by the Rhode Island Division of Motor Vehicles (Department of Revenue), Dealers License and Regulations Office under RIGL Chapter 31-5 (Sale of Motor Vehicles - Licensing of Dealers and Salespersons); 280-RICR-30-20-1 implementing regulations.

How to file in Rhode Island

Applicants file the dealer license application (new or renewal) with the RI DMV Dealers License and Regulations Office along with the executed $50,000 surety bond on the DMV-prescribed form. The bond must be issued by a surety authorized to do business in Rhode Island, is payable to the Department, and must be filed yearly with renewal. The Surety may terminate with 60 days written notice.

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FAQ

Common questions

Is a motor vehicle dealer bond required in Rhode Island?

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

How much is the bond in Rhode Island?

The bond amount is $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 Rhode Island Division of Motor Vehicles (Department of Revenue), Dealers License and Regulations Office.

How is the bond filed?

Applicants file the dealer license application (new or renewal) with the RI DMV Dealers License and Regulations Office along with the executed $50,000 surety bond on the DMV-prescribed form. The bond must be issued by a surety authorized to do business in Rhode Island, is payable to the Department, and must be filed yearly with renewal. The Surety may terminate with 60 days written notice.

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.