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November 25 2013

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Auto Dealer Surety Bonds

If you are the owner of an auto dealer surety bond then there are a few very important dates every year which you will have to keep track of. These dates will be mostly for renewals or expirations of your auto dealer bonds. It is very important that you are aware of any deadlines which may be coming up and also what you are supposed to do at such a time. That's why I have written this article which you can use like a guide to find answers to most of your questions and always ensure you are aware of everything that's happening around you.

The first thing you need to figure out is the value of the bond which you will have to hold. This figure will vary depending on whether you are an independent dealer or are part of a franchise. But this is not your only option. Instead of having a surety bond you can also choose to get a letter of credit for the same value as the surety bond. Paperwork will differ in both these cases, so be careful. But in general, surety bonds are much more common than letters of credit. Now, there are various different license categories for car dealers as well. Go through the list and find out which category you belong to prior taking out a surety bond. The value of the surety bond will vary depending on this choice as well.

Depending on which license type you choose, requirements will change as well. You may need to take some additional forms of insurance for certain categories. It is important that you keep an eye on expiration and renewal dates for all of these insurances/bonds. Expiration dates vary when it comes to auto dealers. While independent dealers may have an expiration date on the 30th of April, franchise dealers need to renew their paperwork around the end of the year, i.e., 31st December.

When it comes to auto dealers, you would know that the number of independent dealers in the country outweighs all other types of dealers. These dealers prefer selling used cars although they can even choose to sell vehicles in wholesale or retail or even both.

At the end of the day, it's important that you always stay ahead when it comes to surety bonds. Never let the expiration date pass without taking requisite action. In fact, you can even start preparing your paperwork and sending out your application as far as a month before your license is due to expire. This allows you enough time to renew your license.

If your auto dealer bonds are up for renewal anytime soon and you haven't yet done anything about it, then you need to take action immediately. If you operate as an independent dealer without a license, you could face criminal charges. Don't play around with surety bonds. After all, in business, unnecessary risks are never warranted are they?

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