Motor Vehicle Dealer Bond in Vermont

What this bond requires in Vermont

Vermont dealers must provide a surety bond, letter of credit, or certificate of deposit between $20,000 and $35,000 under 23 V.S.A. § 453(g); the amount is set by the Commissioner of Motor Vehicles based on the dealer prior-year unit sales. The bond indemnifies the State or vehicle purchasers for losses from a dealer failure to remit fees or taxes and remains in effect for the registration year plus one additional year.

Who requires it

The motor vehicle dealer bond is required by the Vermont Department of Motor Vehicles (Agency of Transportation), Dealer Licensing under 23 V.S.A. § 451 (dealer registration) and 23 V.S.A. § 453(g) (bond/letter of credit/CD requirement).

How to file in Vermont

Applicants submit the Vermont DMV Motor Vehicle Dealer Bond (form VD-114) - or a qualifying letter of credit or assigned certificate of deposit - together with the dealer certificate of registration application to the Vermont DMV. The Commissioner sets the bond amount within the $20,000-$35,000 range based on prior-year sales; bond must be issued by an entity authorized to do business in Vermont.

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FAQ

Common questions

Is a motor vehicle dealer bond required in Vermont?

Yes. Vermont requires motor vehicle dealer bonds issued by an admitted surety. The required amount is $20,000 to $35,000.

How much is the bond in Vermont?

The bond amount is $20,000 to $35,000. Your annual premium is a small percentage of that, based on credit and experience.

Who requires the bond?

The bond is required by the Vermont Department of Motor Vehicles (Agency of Transportation), Dealer Licensing.

How is the bond filed?

Applicants submit the Vermont DMV Motor Vehicle Dealer Bond (form VD-114) - or a qualifying letter of credit or assigned certificate of deposit - together with the dealer certificate of registration application to the Vermont DMV. The Commissioner sets the bond amount within the $20,000-$35,000 range based on prior-year sales; bond must be issued by an entity authorized to do business in Vermont.

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.