Before they can legally conduct business, all California auto dealers must be licensed by the state’s Department of Motor Vehicles as well as the city/county office that regulates local business registration. To make the process easier, SuretyBonds.com has developed this quick and easy guide to outline California auto dealer license and bond requirements.

How to get a California auto dealer license

Whether you’re a new or existing dealer, you should download an application checklist from the California DMV website, which also provides downloadable forms. The checklist will ensure that you meet all requirements and pay all applicable fees, which might include:

• $150 fee for a dealer license application
• $100 fee for a dealer license renewal
• $225 fee for a new auto, commercial and motorcycle dealer license

Before receiving your California auto dealer license, you’ll have to submit all required fees, forms and documents to your local DMV inspector, which can be done at the time of exam. To verify that an inspector will be available, you should schedule an appointment with your local DMV ahead of time. Look on the DMV’s website to find detailed office information in your area.

Auto dealers must also be licensed by the city or county licensing division where they plan to work. For more information on local licensing requirements, contact the the city/county department that regulates auto dealers in your area.

Surety bond information for California auto dealers

Purchasing a surety bond can be one of the most confusing parts of getting a California auto dealer license. To help make the bonding process faster and easier for our clients, the following Q&A offers vital information to dealers who need a California auto dealer bond.

Why do I need a California auto dealer bond?

As with other surety bond types, California auto dealer bonds regulate the industry and protect consumer interests. Auto dealer bonds protect customers, sellers, financial enterprises and/or governmental agencies. If a dealer commits fraud or conducts business in other unethical ways, the bond protects against financial loss.

California Vehicle Code Section 1171 specifically requires California auto dealers to file surety bonds.  Depending on your specific line of work, you will file one of three three specific bond forms.

1. Form OL 25: $50,000 Surety Bond of Dealer
2. Form OL 25A: $50,000 Surety Bond of Vehicle Remanufacturer
3. Form OL 25B: $10,000 Surety Bond of Motorcycle Dealer, Motorcycle Lessor-Retailer, All Terrain Vehicle Dealer, or Wholesale-Only Dealer (fewer than 25 vehicles per year)

If a bonded motor vehicle dealer breaks the bond’s terms, the wronged party (i.e. a customer, bank or government agency) can make a claim against the California surety bond to get reparation.

How much does a California auto dealer bond cost?

The exact price you’ll pay for a surety bond will vary for a couple reasons, namely:

• the surety bond amount (i.e. whether you need a $10,000 or $50,000 surety bond)
• your application and financial credentials

If your financial credentials qualify you for the standard market, your surety bond rate could be calculated as just 1% of the bond amount, which would only be $500 for the standard $50,000 bond. Conversely, dealers with poor credit could pay a premium that’s a higher percentage of the bond amount. The best way to determine your exact surety bond cost is get a free price quote from SuretyBonds.com.

How do I get a surety bond?

SuretyBonds.com can provide you with a free, no obligation California auto dealer bond quote in less than one business day. Once your payment has been processed, your surety specialist will issue your bond.  If you choose overnight shipping, SuretyBonds.com can have the bond in your hands by tomorrow. However, you should apply for your bond a few weeks before it’s due to ensure you have enough time to file it with the DMV.

What do I do with my surety bond once I get it?

Once you’ve received the original bond form in the mail, you’ll submit it to the DMV along with your other license application forms. SuretyBonds.com is not responsible for submitting the bond on your behalf.

How do auto dealer bonds work?

Like other surety bonds, California auto dealer bonds are three-party contracts.

1. Principal: the dealer who purchases the bond to get a license and guarantee compliance with industry regulations
2. Obligee: the DMV that requires the bond to enforce industry regulations and protect consumers
3. Surety: the provider that executes the bond and provides a financial guarantee of the dealer’s performance

According to California law, a dealer’s license will be automatically suspended if a court finds the professional liable for certain actions protected by the bond. The license can only be reinstated if the bond is reinstated or if a new bond is purchased.

Plumbers in Minnesota have new bonding regulations to wade through. Effective January 1, the state now requires plumbers to file a $25,000 Minnesota plumbers bond for a two-year term instead of a one-year term. The term now runs from January 1, 2012, to January 1, 2014. Plumbers who have yet to renew their Minnesota surety bond for the new two-year term should contact SuretyBonds.com immediately.

The Minnesota plumbers bond and the subsewage treatment system (SSTS) bonds are still bound under the same surety bond. All individuals who do plumbing work in Minnesota must purchase a plumbers bond even if they aren’t licensed as a state contractor. However, if they don’t need the plumbers bond, contractors in Minnesota can still get the $10,000 SSTS bond on its own for a one-year term.

According to the Minnesota Department of Labor and Industry,

“A bond helps protect the consumer from work that does not comply with the plumbing code. The state can use the bond amount to have noncomplying work corrected. A bond filed with a city would offer similar protection.”

Download the 2012-2013 Minnesota pipe laying contractors plumbing bond registration packet.

Applicants will submit the original copy of their legally executed Minnesota plumbers surety bond to:

Minnesota Department of Labor and Industry Construction Codes and Licensing Division Licensing and Certification Services
P.O. Box 64222
St. Paul, MN 55164

Yesterday the Maryland Board of Pharmacy posted an updated surety bond form for the state’s wholesale distributors.

Health Occupations Article, 12-6C-05(f), Annotated Code of Maryland, requires applicants to file a surety bond with the Maryland Board of Pharmacy before getting licensed. HB 1195 modified the previous law that had required all wholesale distributors to file a $100,000 Maryland surety bond or alternative form of financial security. The recently enacted law now requires the bonding amount to be based on the distributor’s annual gross receipts.

If wholesale distributor’s receipts from the previous tax year were $10 million or more, a $100,000 surety bond is required. If the receipts total less than $10 million, the wholesale distributor only needs to file a $50,000 bond. The reasoning behind HB 1195 was to give smaller distributors more access to bonding as a $50,000 surety bond is easier to qualify for than a $100,000 surety bond.

According to the bond form, the purpose of the bond is to

“secure payment of any fines or penalties imposed by the Board and any fees and costs incurred by the State of Maryland relating to the permit that are authorized under State law; and are not paid by the permit holder within 30 days after the fines, penalties, fees or costs become final.”

Wholesale distributors must renew the surety bond each time they reapply for their business licenses. Pharmacy warehouses must only be bonded if they are engaged in wholesale distribution.

Wholesale distributors in Maryland will submit completed surety bond forms to

Maryland Board of Pharmacy
4201 Patterson Ave.
Baltimore, MD 21215

For additional information on surety bonds or other licensing requirements, the Maryland Board of Pharmacy can be reached by phone at 800-542-4964 or by e-mail at mdbop@dhmh.state.md.us.

Jefferson County, Missouri, has made some changes to its contractor bond requirements, which went into effect January 1. Previous Jefferson County contractor bond requirements mandated that construction professionals file a $10,000 Missouri surety bond for various construction trades. Jefferson County now requires construction professionals to file a $25,000, and a few new trades now need to be bonded.

Trades that now require a $25,000 Jefferson County, Missouri, contractor license bond include:

• Backflow Preventive Device Tester
• Communications
• Drain-Layer
• Electrical
• Elevator Electrical
• Industrial Electrical
• Lawn Irrigation Installer
• Mechanical
• On-Site Sewer System Designer
• On-Site Evaluator
• Sprinkler Fitter

SuretyBonds.com can issue updated Jefferson County contractor bond forms quickly and easily.

Get a Jefferson County Missouri contractor bond

photo by Gage Skidmore

Yesterday an audio recording in which Newt Gingrich vocalizes his support for mandated health insurance went viral. The recording is stirring up controversy in both parties as Gingrich has frequently denounced “Obamacare” during the past few months of his presidential campaign.

The recording is from a May 2009 Center for Health Transformation conference call Gingrich hosted. At the time, the health care reform act had just been introduced to Congress.

In advocating for a degree of choice in the program, Gingrich proposed that individuals be allowed to post a bond as a way to opt out of purchasing federally mandated health insurance.

“We believe that there should be a must-carry — that is, everybody should have health insurance. Or, if you’re an absolute libertarian, we would allow you to post a bond. But we would not allow people to be free-riders failing to insure themselves and then showing  up at the emergency room with no means of payment.”

Gingrich also expressed similar sentiments as recently as May 2011 in an appearance on “Meet the Press.” On the show Gingrich said, “I’ve said consistently that we ought to have some requirement that you either have health insurance, or you post a bond, or in some way you indicate you’re going to be held accountable.”

Gingrich’s initial support for universal health care did vary from President Barack Obama’s plan in that it included options, which is where his suggestion for individual surety bonds comes in. But could a surety bond option reasonably substitute required health insurance policies? Not likely.

First of all, surety providers do not underwrite bonds in the same way insurance companies write health insurance policies. Insurance companies expect a reasonable number of claims to be made whereas surety providers only write bonds for principals who are highly unlikely to ever have a claim made against them. As such, surety providers would likely screen applicants for pre-existing conditions and other risky health factors. Insurance companies won’t be able to do so once the health care reform goes into full effect, but that doesn’t mean it would apply to surety providers.

Furthermore, according to HotAir.com, “In 2008, put the price of that [health care] bond at $100,000 – $150,000 — far out of the reach of most Americans.” Applicants who have a credit score of 700 or higher typically pay premiums calculated at 1 to 5% of the total bond amount. This would mean applicants who qualify for the standard market would pay $1,000 to $5,000 for a $100,000 bond or $1,500 to $7,500 for a $150,000 bond.

Those with credit scores below 700 could pay rates up to 20%, which would mean $20,000 to $25,000 premiums. As such, surety bond premiums would be nearly impossible for most Americans to afford. Not to mention the fact that surety bonds typically aren’t one-time purchases as each bond that’s issued is only valid for a certain duration. When the bond expires, the principal would be forced to purchase a new bond and pay the premium again.

Although Gingrich’s idea to offer bonding as an alternative to mandated health insurance policies might have, theoretically, given Americans a choice, it was quite misguided. Realistically it would have done nothing more than back individuals into a corner where purchasing an insurance policy would be the only real choice.

Of course, Gingrich currently continues to denounce “Obamacare” and claims he will overturn it if elected president, which is a far cry from where he stood on the issue less than a year ago.

Georgia auto dealer bonds expire statewide on March 31. Only Georgia auto dealers who sell used vehicles must file a $35,000 surety bond as a part of the state’s used auto dealer licensing process.

Qualified applicants who work with SuretyBonds.com could pay just $550 for a two-year, $35,000 Georgia auto dealer bond. To speak with a surety specialist about your Georgia surety bond, call 1 (800) 308-4358 Monday through Friday between 8 a.m. and 7 p.m. CST.

Auto dealers who are looking for lower rates might also be interested in contacting a SuretyBonds.com specialist. As brokers, they shop every bond application around with various underwriters to find some of the industry’s lowest rates. SuretyBonds.com can bond 99% of applicants regardless of their qualifying credentials.

The Georgia auto dealer bond requirement helps regulate the the state’s auto industry and also protects its consumers. The legal language found on the bond form provides a financial guarantee that auto dealers will comply with

“the conditions of any written contract or written warranty by such dealer or his agent, made in connection with the sale or exchange of any motor vehicle and shall pay all loss, damages, and expenses that may be sustained by any purchasers of any used motor vehicle and their vendees or successors in title by reason of any fraudulent misrepresentation as to liens against or titles to any used motor vehicle then the bond is to be void, otherwise it is to remain of full force and effect.”

This language essentially holds auto dealers accountable for financial losses consumers might incur when dealers misrepresent merchandise or use fraudulent sales tactics.

The state’s auto dealer bond form expires on even-numbered years. Failing to get a new bond issued before March 31 could result in a lapse of surety bond coverage.

Dealers will submit their Georgia auto dealer bonds to

Georgia State Board of Registration of Used Motor Vehicle Dealers & Used Motor Vehicle Parts Dealers
Used Motor Vehicle Dealers Division
P.O. Box 13446
Macon, GA 31208

The Georgia auto dealer licensing department can be reached at (404) 968-3880.

If you watched President Barack Obama’s State of the Union address on January 24, you probably remember a few key talking points about his stance on taxation, job creation and education, among other initiatives. What you might not have realized, though, is how some of his suggested overhauls could affect the way government agencies across the nation use surety bonds.

Obama briefly called out the mortgage lending industry for its corrupt lending practices of late. He then declared that Americans must hold lenders to higher standards in the future.

“We’ve all paid the price for lenders who sold mortgages to people who couldn’t afford them, and buyers who knew they couldn’t afford them. That’s why we need smart regulations to prevent irresponsible behavior. Rules to prevent financial fraud, or toxic dumping, or faulty medical devices, don’t destroy the free market. They make the free market work better.”

Surety bond requirements are commonly used to regulate professionals who work in finance. In short, the use of surety bonds holds professionals to higher industry standards. For example, surety bond requirements are enforced in the mortgage industry to curb instances of fraud and other unethical lending practices. The financial guarantee provide by mortgage bonds can protect consumers from lenders who might

• deliberately approve borrowers for loans they won’t be able to repay
• encourage buyers to use fraud when applying for mortgages
• pressure buyers into certain loan products, including high-risk loans or loans with higher interest rates
• intentionally target vulnerable or at-risk buyers and suggest cash-out refinances

Mortgage professionals typically have to file a surety bond before they can get their industry licenses. If their financial credentials or past work records disqualify them from a bond as required, they will not be permitted to work in the industry. As such, the surety application process keeps financially unstable or otherwise unqualified individuals from gaining a position through which they might take advantage of consumers.

A number of licensing agencies have discovered just how useful surety bonds requirements can be when screening those looking for jobs in the finance industry. As such, a number of new surety bond requirements have been established during the past few years. These new bonding requirements keep unqualified individuals out of the markets that have recently been known to take advantage of consumers.

Within the past two years, state governments in 10 states have established new surety bond requirements for appraisal management companies. These new appraisal management bonds provide a financial guarantee that appraisal management companies will fulfill their tasks according to law. If the trend of further regulating unruly financial professions continues — as Obama advocates — appraisal management companies across the country might find themselves struggling to get licensed.

Surety bond regulations are also being used to prevent a second robo-signing crisis, which resulted in the mass production of false and forged mortgages across the country. To combat the potential for such a problem in the future, Alabama recently increased its required surety bond amount for notaries from $10,000 to $25,000. The $25,000 notary bond amount is currently the highest in the nation.

The need to protect consumers from unneeded financial loss in the current unstable economy makes one thing certain: the government certainly values the financial security that surety bonds provide. If Obama’s call for stronger regulation is answered, government agencies will begin revising existing surety bond requirements while also developing new ones.

Surety bond requirements intended to protect environments near Pennsylvania coal mines have been producing the very problems they attempt to prevent.

Because coal mine operators in Pennsylvania often have trouble funding the expensive surety bonds required for mine reclamation, they can’t get approved to work on reclaimed sites. As a result, more than 100 abandoned mine discharge sites can be found across the state.

Before surface mining can begin on an existing site, the mine operator must file a Pennsylvania surety bond with the Department of Environmental Protection. The department determines an individual bond amount based on the mine operator’s estimated cost of fulfilling the project. The bond amount must cover the full project amount in case it should be left unfinished, which means the surety bond costs owners pay can be substantial.

The bonds provide a financial guarantee that coal mining sites will be properly reclaimed when the project is finished. However, when mine site operators cannot get the bonds required for mine reclamations, the sites cannot be reclaimed, and taxpayers are left footing the bill on unclaimed mining sites.

To counter the problem, lawmakers in Pennsylvania are considering legislation that would make the required surety bonds more accessible to mine operators. According to the Republican Herald out of Pennsylvania, “Part of House Bill 1813 is also a permanent Pennsylvania Re-Mining Financial Guarantees program that provides affordable bonding coverage as an incentive to encourage operators to re-enter and re-mine abandoned mines sites around the state.”

Simply put, passage of Pennsylvania House Bill 1813 would make it easier for the state’s mine operators to get the surety bonds they need.

On January 11, the Pennsylvania House passed the bill by a vote of 193-1. It currently awaits consideration in the Senate.

Before beginning their commissions, new and renewing notaries in Alabama must now file much larger surety bonds than previously required. The change went into effect January 1.

In 2011, Alabama increased the required notary bond amount from $10,000 to $25,000, which is currently the nation’s highest notary bond amount. The reasoning behind the significant increase is to cut down instances of notary misconduct as a part of America’s recent”robo-signing” crisis.

Notary bonds do not protect notaries; rather, they protect consumers from notaries who might commit fraud or other errors. If a notary should make a mistake that’s against the bond’s terms, a claim can be filed against the bond so that consumers have access to financial reparation.

Surety companies have traditionally issued notary bonds quickly and easily without credit checks. With the significant increase in the bond amount, some surety providers review notary bond applicants more closely.

The Florida Legislature doesn’t want to take any risks when it comes to the possibility of licensing new destination resort casinos.

The Seminole Tribe of Florida currently maintains exclusive casino gaming rights in the state. However, passage of Senate Bill 710 would allow up to three unaffiliated operators to build destination resort casinos.

One part of Senate Bill 710 would require casino operators to file a surety bond with the state before being approved for a destination resort license.

The bond would provide a legal guarantee that operators

• make all required payments to the Chief Financial Officer
• keep the licensee’s books and records
• make reports as provided
• conduct limited gaming activities according to law

The bill would also dissolve the Division of Parimutuel Wagering and establish a new Department of Gaming Control in its place. This new department would set the bond’s penal sum based on a casino’s total annual license fees and estimated taxes.

In lieu of a bond, the operator may deposit another means of financial security, including

• a savings certificate
• a certificate of deposit
• an investment certificate
• a letter of credit from a bank, savings bank, credit union or savings and loan association.

The bill also contains a number of other stipulations that would further regulate new destination resort casinos. According to Florida Today,  “The gambling bill likely will be one of the most heavily lobbied issues of the 2012 session.”

On Monday, the Senate Regulated Industries Committee passed the bill, which was introduced to the Senate on Tuesday. The bill could be discussed in the House Business and Consumer Affairs Committee early next week.