Apart from being known as the site of the Manhattan project and UFOs, New Mexico is a beautiful state with lots of history. If you're buying or selling new and used cars in New Mexico, it's essential to comply with the regulations set forth by the New Mexico Motor Vehicle Division (MVD). Under New Mexico Statute Section 66-4-1, you must register as a licensed motor vehicle dealer in order to dealer in vehicles, vehicle parts in a retail or wholesale fashion. The Section 66-4-7 states that before obtaining your license, you are required to obtain a dealer bond.
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Several factors influence the cost of a New Mexico dealer bond, including your credit score, experience in the dealership industry, and the insurance company providing the bond. Among these factors, your credit score typically has the most significant impact. The cost of the bond usually falls within the range of 0.6% to 10% of the bond amount required. The better your credit score and credit history, the more affordable the bond becomes. To illustrate, our one-year, $50,000 New Mexico motor vehicle dealer bond starts at $300.
A New Mexico auto dealer bond is a three-party agreement that involves the surety company (the surety), the auto dealer (the principal of the bond), and the New Mexico Motor Vehicle Division (the obligee). In this contract, the surety company guarantees that the auto dealer will adhere to the requirements specified in New Mexico Statutes 66-4-7, as mandated by the New Mexico Motor Vehicle Division. Should the dealer fail to meet these terms—such as not remitting sales taxes to the government or committing title fraud or errors—a claim can be filed against the bond. This claim serves to provide financial compensation to the affected parties.
The surety company conducts a thorough investigation to determine the validity of the claim. If it's deemed valid, the surety company will pay out an amount up to the maximum bond coverage. Importantly, the bond's principal (the dealer) is responsible for reimbursing the surety for all the money disbursed for their claim.
There are two auto dealer bonds in the state of New Mexico, a $50,000 bond and a $12,5000 bond. The $12,500 bond is meant for motorcycle dealers, and the $50,000 bond is for all other dealers (used, new, wholesale, distributors, title service company).
Yes, rather than using the surety bond, applicants can choose to give the government the same amount of cash or federal / new mexico bond. Please note that the cash of the bond amount would need to be kept in the government throughout the time your license is active. For example, if you are a used vehicle dealer, rather than using the $50,000 bond which costs around $300 a year, you would have the New Mexico Motor Vehicle Division to keep $50,000 cash as long as you are a licensed dealer. Clearly, it is much easier and cheaper to buy a surety bond than other security options.
If you don’t file your bond, your license will be suspended or canceled. In order to avoid your license from being suspended, please make sure you have filed your bond and that your bond is up to date with your license. Your bond term should cover your license term.
How Fast Can I Obtain the New Mexico Motor Vehicle Dealer Surety Bond?
You can obtain your surety bond within as little as 4 hours from the moment you complete the application and make the necessary payment upon receiving the payment link.
The process is straightforward. Begin by filling out the application form, providing the following information:
Once you've supplied this information, we will leverage it to seek out the most affordable quotes from our extensive network of more than 10 insurance partners. If you are satisfied with the quote, we will send you a payment link. Once the payment is made, we will promptly email you the bond.
You have the flexibility to choose the term length for your Auto Dealer Bond. However, all New Mexico Auto Dealer bonds share a common expiration date of March 31st. This specific date aligns with the expiration of all New Mexico Auto Dealer licenses. Therefore, a new bond or proof of continuous bond coverage must be submitted to the New Mexico Motor Vehicle Division before March 31st each year. This ensures that your dealership remains compliant and licensed to operate in the state.