Motor Vehicle Dealer Bond in South Dakota

What this bond requires in South Dakota

South Dakota requires a tiered surety bond under SDCL Ch. 32-6B: $25,000 for new/used motor vehicle, mobile home, and final-stage manufacturer dealers; $20,000 for boat dealers; $10,000 for trailer and emergency vehicle dealers; $5,000 for motorcycle and snowmobile dealers. Dealers must also maintain a public liability insurance policy of at least $300,000 (except trailer/snowmobile/mobile home/boat dealers). Renewing dealers do not need to refile a bond unless the dealership name changes.

Who requires it

The motor vehicle dealer bond is required by the South Dakota Department of Revenue, Motor Vehicle Division - Dealer Licensing under SDCL Chapter 32-6B (Motor Vehicle Dealers).

How to file in South Dakota

Applicants submit the dealer license application along with the surety bond on the form prescribed by the South Dakota Department of Revenue Motor Vehicle Division. The bond must be issued by a surety qualified in South Dakota. Existing bonds remain in force across annual license renewals unless the dealership name changes or a new bond is issued.

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FAQ

Common questions

Is a motor vehicle dealer bond required in South Dakota?

Yes. South Dakota requires motor vehicle dealer bonds issued by an admitted surety. The required amount is $5,000 to $25,000.

How much is the bond in South Dakota?

The bond amount is $5,000 to $25,000. 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 Dakota Department of Revenue, Motor Vehicle Division - Dealer Licensing.

How is the bond filed?

Applicants submit the dealer license application along with the surety bond on the form prescribed by the South Dakota Department of Revenue Motor Vehicle Division. The bond must be issued by a surety qualified in South Dakota. Existing bonds remain in force across annual license renewals unless the dealership name changes or a new bond 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.