A surety bond is a guarantee from a Surety to a government and it is basically that a company will comply with state law, municipal ordinance, or regulation. It’s mandatory for an individual that is applying for motor vehicle dealer license to have a surety bond, the amount has to match or be greater than the amount that is required for the type of license see (Type of License Amount of Bond Term of Bond) below. The original bond must be issued to expire at the end of the licensing period, while successive bonds must be issued concurrent with the licensing period. Continuation certificates can also be used in place of successive bonds. The name used in issuing the surety bond must be the same as that used in all fictitious trade (DBA) as well as on the form that will be provided by the Division of Motorist Services. Substitute forms and any form of alteration are not acceptable. The licensee is also required to indicate the name and address of his business as well as his official signature and telephone numbers on the bond. All documents of the surety bond must have the official seal of the bond company. The aspiring licensee should submit their dealer license application along with the original bond form and the power of attorney form from the bond company.

Original surety bonds must be submitted on the appropriate form issued by the State of Florida HSMV86018: http://www.flhsmv.gov/dmv/forms/BFO/86018.pdf , HSMV86019: http://www.flhsmv.gov/dmv/forms/BFO/86019.pdf , HSMV86020: http://www.flhsmv.gov/dmv/forms/BFO/86020.pdf The original Power of Attorney must also be included.

Please note: No other forms than those given by the State will be allowed.  Forms must be complete and free of any modifications made after the fact (absolutely no erasures, white outs, cross-outs, etc…this will not be accepted).

As a dealer if you decide to change bond companies, the dealer must notify the Division of Motorist Services by submitting the new bond information using the appropriate form. The coverage period of the new bond must take effect immediately on the day the old bond coverage terminates or the day after (cannot lapse). A  Bond Rider is acceptable If the dealer is only modifying the same surety bond.

Per Section 95.11(2)(b), Florida Statutes, Surety bonds are generally bound by a 5 year statute of limitations. This means the State of Florida will allow claims to be filed against a bond for a period of up to 5 years after cancellation/termination of the bond. Bonds cover all transactions at every location of the dealership.

Motor vehicle dealers, mobile home dealers, and mobile home manufacturers may submit an irrevocable letter of credit by using the appropriate form issued by the State of Florida HSMV86057: http://www.flhsmv.gov/dmv/forms/BFO/86057.pdf , HSMV86058: http://www.flhsmv.gov/dmv/forms/BFO/86058.pdf Dealers must submit a Letter of Credit in the amount of $25,000. Manufacturers must submit a Letter of Credit in the amount of $50,000. In either case, the Letter of Credit must be issued by a Florida bank.

A new irrevocable letter of credit or continuation certificate shall be delivered to the Division by the dealer at the beginning of each license period. If a dealer changes banks, the dealer must notify the Division of Motorist Services by submitting the new Letter of Credit information on the appropriate form. Further, the coverage period of the new Letter of Credit must take effect immediately on the day the old bond coverage terminates or the day after. There must be no lapse in coverage.

Per Section 95.11(2)(b), Florida Statutes, Letters of Credit are generally bound by a 5 year statute of limitations. This means the State of Florida will allow claims to be filed against a Letter of Credit for a period of up to 5 years after cancellation/termination of the bond. Letters of Credit cover all transactions at every location of the dealership.