A Consumer’s Guide to the Motor Vehicle Dealer Surety Bond


As a consumer, it can sometimes be intimidating going into a car dealership. One thing that may make you feel better and more confident in doing so is an understanding of what is known as a motor vehicle dealer bond.

There many different types of bonds. In this case, we are talking about a particular type known as a surety bond. With this type of bond, a third party agrees to pay for certain obligations of a second party in case that party not perform as required. In this case, the third party is a bond company issuing a bond to a car dealership, the second party.

“MVD” is an abbreviation for the motor vehicle dealer, or in this case, a motor vehicle dealer bond. Car dealers are required to obtain this bond before they can get a license to sell cars. The bond stands as a sort of financial guarantee that the dealer will comply with all relevant laws as well as pay all applicable taxes. Importantly, this bond will also compensate a consumer for any consequences that arise from the fraudulent or wrongful actions of an employee of the dealership as it relates to the consumer. Put simply, you have more protection than you think when dealing with an auto dealership.

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