Motor Vehicle Dealer Bond in South Carolina

What this bond requires in South Carolina

Under 2023 Act 51, effective January 1, 2024, S.C. Code Section 56-15-320 requires each applicant for licensure as a motor vehicle dealer or wholesaler to furnish a surety bond in the penal amount of $50,000 (increased from the previous $30,000), with reduced amounts of $25,000 for motorcycle-only dealers and $15,000 for wholesale auto auctions. The dealer license expires immediately if the bond is terminated or reduced below the required amount.

Who requires it

The motor vehicle dealer bond is required by the South Carolina Department of Motor Vehicles, Dealer Licensing Section under S.C. Code Title 56 Chapter 15 (Section 56-15-320, as amended by 2023 Act 51).

How to file in South Carolina

Applicants submit the original Motor Vehicle Dealer and Wholesaler Surety Bond (Form DLA-1B) signed by the owner, partner, or corporate officer, along with an original Power of Attorney from the surety, to the SCDMV Dealer Licensing Section as part of the dealer license application. The bond must be issued by a corporate surety company authorized in South Carolina.

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FAQ

Common questions

Is a motor vehicle dealer bond required in South Carolina?

Yes. South Carolina requires motor vehicle dealer bonds issued by an admitted surety. The required amount is $15,000 to $50,000.

How much is the bond in South Carolina?

The bond amount is $15,000 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 South Carolina Department of Motor Vehicles, Dealer Licensing Section.

How is the bond filed?

Applicants submit the original Motor Vehicle Dealer and Wholesaler Surety Bond (Form DLA-1B) signed by the owner, partner, or corporate officer, along with an original Power of Attorney from the surety, to the SCDMV Dealer Licensing Section as part of the dealer license application. The bond must be issued by a corporate surety company authorized in South Carolina.

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.