Here's a table with the bond amount and type of license required.
Note that a representative or consignee of a dealer is not required to file a bond as long as the dealer they work for has a bond.
The Utah State Code, Chapter 3, Title 41, Section 205 specifies that the bond will only be accepted if the issuing company is licensed to do business in the state and has at least a higher than B+ rating by the A.M.Best Company.
The bond mainly is used to provide a financial compensation to parties engaged with the dealers (i.e., suppliers, customers) that are harmed due to fraud and fraudulent representation of the dealers. Some examples of the fraudulent actions can be listed below:
According to Utah State Code, Chapter 3, Title 41, Section 205, a claim can be valid only if the following two statements are true:
(1). A written claim is submitted to the administrator within one year after the reason for the claim occurred
(2). The legal action started within two years after the claim was submitted to the administrator.
Only after six months have passed since the filing of the claim can the surety company start to determine the validity of the claim. If the claim is valid, then the surety company will pay out the principal up to the amount of the bond penal sum. The principal then would need to inform the administrator the bond has been settled. Surety bonds, different from insurance, have an indemnity clause which gives surety companies the authority to seek reimbursement from the bond principal. Therefore, the bonding company will seek to recoup their claim loss from the principal.
You would need to file your original bond to the following address:
Motor Vehicle Enforcement Division
210 N 1950 W
Salt Lake City, UT 84134
Please note that your would need to attach an notary form, formally known as “Affidavit of Qualification” form to the bond.
You have the flexibility to choose the term length for your auto dealer bond. However, all Utah auto dealer bonds share a standard expiration date of June 30th. This specific date aligns with the expiration of all Utah auto dealer licenses. Consequently, a new bond or proof of continuous bond coverage must be submitted to The Utah Motor Vehicle Enforcement Division before June 30th each year. This ensures that your dealership remains compliant and licensed to operate in the state.