So you have finally saved up enough money to buy that dream car of yours, well congratulations. It is not easy to come up with such discipline and save money. One thing though, that smile of yours could quickly turn to a huge frown if you do not buy that vehicle from a bonded dealer or in simpler terms, a dealer who has an auto dealer bond.
With an auto dealer bond, you are protected against any form of underhand dealings from the auto dealer in which case the bonding company or the surety as it is more aptly referred to, simply pay you compensation. Even if it’s a recreational vehicle, a trailer or RV you are looking at, it is still advised that you get the vehicle from a bonded dealer. An auto dealer bond is a sort of legal contract or guarantee which protects you the buyer from loss of funds if contractual agreements are not kept to. Bonding companies do a lot of research and scrutiny before accepting anyone and due to this; it is very hard to find a bonded dealer defaulting.
In California and almost every other state, it is a legal requirement for motor vehicle dealers to get an auto dealer bond. In California, motor vehicle dealers are expected to post a $50,000 bond. Dealer’s premiums amount to a small percentage of actual bond; MVD fees differ for motor vehicle dealers depending on longevity, business and personal credit scores, and financial solvency of the dealership.