Louisiana Auto Dealer Bond Guide
If you are a motor vehicle dealer, salesperson or facility in Louisiana, you need a surety bond to ensure proper business practice. Read on to learn more about what bond you need!
Bond Overview
- Purpose: To protect dealership customers from fraud and misconduct
- Who Needs It: New, used and recreational vehicle dealers
- Regulating Body: The Louisiana Motor Vehicle Commission
- Required Amount: $10,000–$50,000 depending on the license type
- Premium Rates: Credit-based, starting at 1% of the bond amount per year
What Is a Louisiana Auto Dealer Bond?
The Louisiana Motor Vehicle Commission (LMVC) requires auto dealers, facilities and salespeople to purchase a surety bond to ensure proper business practice per Louisiana Revised Statutes Title 32.These motor vehicle dealer bonds protect customers from financial harm in the event of misconduct or fraud.
Who Needs an Auto Dealer Bond?
In general, anyone who is licensed to sell motor vehicles, specialty vehicles or recreational vehicles — franchise or distributor — needs a type of auto dealer bond in Louisiana.
Who Needs a Motor Vehicle Facility Bond?
Entities that sell new and used cars and other vehicles need a $10,000 motor vehicle facility bond. In Louisiana, motor vehicle facilities include, but are not limited to, the following:
- Sellers, lessors or repairers of motor vehicles
- Dealerships
- Satellite warranty and repair centers
- Vehicle brokers
Who Needs a Recreational Products Dealer Bond?
Louisiana also requires dealers that sell recreational vehicles to purchase a $20,000 surety bond. Recreational products include, but are not limited to, the following:
- Motorcycles
- All-terrain vehicles (ATVs)
- Watercraft
- RVs and trailers
Who Needs a Specialty Vehicle Dealer Bond?
Anyone who has a franchise agreement with second-stage manufacturers of specialty vehicles must purchase a $20,000 surety bond. Specialty vehicles include, but are not limited to, the following:
- Ambulances
- Fire trucks
- Garbage trucks
- Hearses
- Limousines
- School buses
- Street sweepers
Note: Specialty vehicles do not include motor homes.
How Much Do Auto Dealer Bonds Cost in Louisiana?
Louisiana motor vehicle dealers must purchase either a $10,000, $20,000 or $50,000 surety bond based on the license type. Bond premiums start at $100, but exact rates vary based on credit score and other financial factors.
Select your bond below to get a free quote within one business day.
You may be eligible to save 25% and time on renewals by selecting a multi-year term at checkout.
How Does a Louisiana Auto Dealer Bond Work?
By purchasing a Louisiana motor vehicle dealer bond, you enter a legally-binding contract between three parties:
- Principal: The dealer, facility or salesperson purchasing the bond
- Obligee: The Louisiana Motor Vehicle Commission
- Surety: The provider issuing the bond
If you, as the principal, break the bond terms, harmed parties can file claims for reimbursement. The surety will validate and pay claims up to the full bond amount. You are then responsible for refunding the surety for all expenses incurred.
How Do I Get an Auto Dealer Bond in Louisiana?
SuretyBonds.com provides the fastest and easiest way to get a new, used, specialty, or recreational motor vehicle dealer bond in Louisiana. Just follow these quick steps:
- Apply online at SuretyBonds.com
- Get a free quote within one business day
- Buy online or over the phone
- Receive your bond*
- Sign and submit the bond form to the CDOR
Be sure to include your dealer license number, county, and district number on your application.
*Note: We’ll mail physical copies of all bonds except for the recreational products dealer bond and used motor vehicle dealer bond which will be delivered digitally instead.
How Fast Can I Get My Bond?
Most quotes are processed same-day. Once you receive your invoice, you can purchase it online 24/7. You’ll receive your bond form via email within minutes of purchase.
How Do I Renew My Auto Dealer Bond?
Louisiana motor vehicle dealer bonds expire annually.* A SuretyBonds.com representative will contact you during the renewal period with an invoice and next steps. Follow the instructions provided to maintain your coverage for an additional term.
*Note: Used motor vehicle dealer bonds have two-year terms.
How to Get a Used Auto Dealer License in Louisiana
To become a licensed used auto dealer in Louisiana, you must apply for a license with the Used Motor Vehicle Commission. Complete the following steps to get your license:
- Submit an application
- Submit a salesperson application(s)*
- Complete an educational training seminar
- Purchase the appropriate surety bond
- Purchase garage liability insurance
- Meet local zoning laws
- Meet business sign requirements
- List your business phone with Nationwide Directory Assistance (411)
- Pay applicable fees
If you operate under an incorporation, LLC, LP, or LLP, you must register your business with the Louisiana Secretary of State. For details and forms for other motor vehicle license types, contact the LMVC.
*Note: Each dealer must have at least one salesperson.
