Motor Vehicle Dealer Bond

Huff Insurance, Pasadean MDMaryland Auto Dealers need to have an MVA Dealer bond as part of the Auto Dealer licensing requirements

A used car dealer bond or a new car dealer bond is required by the Maryland Department of Motor Vehicles before you are able to get dealer tags. Both wholesale auto dealers and retail auto dealers in Maryland are required to get a minimum of a $15,000 dealer bond. The amount of the bond can increase as the volume of your business increases.

The MVA bond is a surety bond which is a three-party agreement between the surety company, the MVA and the auto dealer. The purpose of the bond is to ensure that the Maryland Department of Motor Vehicles is paid their sales tax when a car is sold. If you fail to pay the tax due they will file a claim against your bond and the insurance company will pay the tax due. Then the bonding company will file a request against the dealership to have the amount re-paid. If the dealership fails to pay the bonding company the bonding company will seek legal action against the dealership and the owners of the business individually to have the damages repaid.

A bond is issued with the expectations that the legal obligations will be fulfilled and subsequently, losses are not included in the cost of the bond premium. A surety company does have to determine the risk of a loss occurring if the dealership is unable to satisfy the obligation under the bond. Since a bond is an extension of credit, your financial information is reviewed and is used to determine both pricing and eligibility. Both the business financials and individual owner’s financials will be reviewed.

Having a dealership requires you to obtain both garage liability, and a dealers bond in order to obtain your license. Additional coverage such as property, workers compensation, dealer’s physical damage coverage,employee dishonesty, and employment practices liability insurance coverage are all available to properly cover your business.

Huff Insurance

Customers of Huff Insurance can expect excellent service from our local independent agent. Learn more about your options for bonds by filling out our Bond Insurance Quote Form right away or calling us at 410-647-1111. Get a free quote from one of our experienced agents and don’t go another minute missing out on another opportunity because you don't have the auto dealer bond that you need.


Main Office

Huff Insurance
8349 Ritchie Hwy
Pasadena, MD 21122
410-647-1111