Used Car Dealers Need Auto Dealer Bonds in Massachusetts

In Massachusetts, any used car dealers that sell cars in a “business facility open to the public” are required to be licensed with the state. Dealers that sell cars privately do not need to be licensed. As part of the licensing process, dealers must obtain a $25,000 “Used Car Dealer Bond”. This is also known colloquially as an auto dealer bond or motor vehicle dealer bond. This requirement is documented in Massachusetts General Laws Part 1 Title 20 Chapter 140, Section 58. New/franchised car dealers are exempt from licensing requirements in Massachusetts. We have ample experience in helping Massachusetts dealers obtain the right bond. To get an instant quote, fill out our short form, which only takes 3 minutes.

Sample Payment and Performance Bond Form
Used Motor Vehicle Dealer Bond

Bond Amount: $25,000

Required By: State of Massachusetts

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Acceptance Guaranteed
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Refund within 5 days if not satisfactory
1 Year Bond Starts at
1 Year Bond Price
$230
of bond amount, based on credit check
based on your credit history
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How much does it cost?

Our rates for the $25,000 Massachusetts auto dealer bond starts at $230 for a 1 year bond. This price is mostly based on the applicant’s credit score. Generally speaking, a higher credit score equals lower prices. In some cases, we may be able to secure a lower rate if you have experience as a car dealer.

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Massachusetts Auto Dealer Bond Common FAQs

Do I need a credit check for this bond?

Yes, to get a quote for a Massachusetts used auto dealer bond, insurance companies need to run a SSN based “soft” credit check to determine pricing and eligibility, but it won't affect your credit score. 

How long does it take to get bonded? 

If you send your application before 4pm CST, we can usually complete your bond on the same day. However, there might be some cases where unexpected complications may arise due to a low credit score or previously occurred bond claims.

How can I avoid claims against my bond?

To avoid bond claims, it's crucial to adhere to the guidelines established by the state of Massachusetts. This entails conducting your auto dealer business with honesty and transparency, and putting your customers' best interests first. Specifically, you must ensure that you correctly pay all fees and taxes associated with vehicle sales, and provide valid car titles to your customers. By doing so, you minimize the risk of having claims against your bond.

When will my bond expire?

For a 1-year bond, it will end after 1 year from the start date. To maintain your license, you must renew it before the expiration date. If you choose to bond with us, we’ll keep track of when you need to renew your bond so you can focus on your business. 

What if I have poor credit?

Some insurance companies classify credit scores below 650 as "poor." Nevertheless, it’s still possible to get bonded. We work with insurance providers that concentrate on offering bonds to low credit individuals. If your credit score is not excellent, let us know, and we'll assist you by shopping around with the specialized carriers within our network. Our team has aided many individuals with less than ideal credit in fulfilling their bonding needs. 

How to prove that I’m bonded?

Upon approval of your bond, we will send you a PDF copy via email to serve as proof of your bonding. We keep copies of the bond on file in case the original is lost. If you need another copy, give us a call and we’ll email you an additional copy. 

How are Massachusetts auto dealer bonds priced?

The cost of a Massachusetts dealer bond is influenced by various factors, such as the applicant's credit score, dealer experience, and insurance provider. However, the most significant factor is often the applicant's credit score, with the insurance company being the next most influential. We partner with over 10 insurance companies to offer our clients highly competitive rates regardless of their credit score. If you happen to find a better rate elsewhere, let us know and we'll make every effort to match it.

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