DC Automobile Repossessor Bond: A Comprehensive Guide
This guide provides information for insurance agents to help automobile repossessors obtain DC Automobile Respossessor Bonds
At a Glance:
- Lowest Cost: $100 per year or $10 per month, based on the bond applicant’s credit
- Bond Amount: $5,000
- Who Needs it: All automobile repossessors seeking to obtain a license in the District of Columbia
- Purpose: To ensure the public will receive compensation for any damages should the automobile repossessor fail to comply with licensing law
- Who Regulates Automobile Repossessors in DC: The District of Columbia Department of Consumer and Regulatory Affairs (DCRA)
Background
DC Statute 16-301 requires all automobile repossessors operating in the district to obtain a license with the DCRA. The District of Columbia enacted the licensing laws and regulations to ensure that auto repossessors engage in ethical business practices. In order to provide financial security for the enforcement of the licensing law, auto repossessors must purchase and maintain a $5,000 surety bond to be eligible for licensure.
What is the Purpose of the DC Automobile Repossessor Bond?
DC requires automobile repossessors to purchase a surety bond as part of the application process to obtain an auto repossession license. The bond ensures that the public will receive compensation for financial harm if the repossessor fails to comply with the licensing regulations. In short, the bond is a type of insurance that protects the public if the repossessor breaks licensing laws.
How Can an Insurance Agent Obtain a DC Automobile Repossessor Surety Bond?
BondExchange makes obtaining a DC Automobile Repossessor Bond easy. Simply login to your account and use our keyword search to find the “auto” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.
At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.
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Is a Credit Check Required for the DC Automobile Repossessor Bond?
Surety companies will run a credit check on the owners of the automobile repossession company to determine eligibility and pricing for the DC Automobile Repossessor bond. Owner’s with excellent credit and work experience can expect to receive the best rates. Owners with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the owner’s credit.
How Much Does the DC Automobile Repossessor Bond Cost?
The DC Automobile Repossessor surety bond can cost anywhere between $100 to $375 per year or $10 to $38 per month. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. The chart below offers a quick reference for the approximate bond cost on a $5,000 bond requirement.
$5,000 Automobile Repossessor Bond Cost
| Credit Score | Bond Cost (1 year) | Bond Cost (1 month) |
|---|---|---|
| 625+ | $100 | $10 |
| 574 – 624 | $188 | $19 |
| 550 – 574 | $250 | $25 |
| 500 – 549 | $375 | $38 |
*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.
How Does DC Define “Automobile Repossessor?”
To paraphrase DC Statute 16-399, an automobile repossessor is any individual or business entity who physically takes possession of any motor vehicle and transports it to a creditor.
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
How do Automobile Repossessors Apply for a License in DC?
Automobile repossessors in DC must navigate several steps to secure their license. Below are the general guidelines, but license applicants should refer to the DCRA’s licensing requirements for details on the process.
License Period – The DC Automobile Repossessor License expires on October 31 of each year and must be renewed before the expiration date
Step 1 – Purchase a Surety Bond
Automobile repossessors must purchase and maintain a $5,000 surety bond
Step 2 – Complete the Auto Repossessor Designation Letter
Repossessors must fill out an auto repossessor designation letter indicating all employees authorized to perform repossessions on behalf of the license holder
Step 3 – Obtain a Certificate of Occupancy
Repossessors are required to obtain a Certificate of Occupancy verifying their principal place of business does not violate any building or zoning codes.
Step 4 – Complete the Application
All DC Automobile Repossessor License applications can be completed online through the DCRA’s licensing portal. Applicants must complete the entire application, and pay a $556.60 licensing fee.
Automobile repossessors who are organized as a corporation will need to obtain a corporate registration prior to submitting their license application.
How Do DC Automobile Repossessors Renew Their License?
Automobile repossessors can renew their license online through the DCRA’s licensing portal. The DC Automobile Repossessor License expires on October 31 of each year and must be renewed before the expiration date.
What Are the Insurance Requirements for the DC Auto Repossessor License?
The District of Columbia does not require auto repossessors to obtain any form of liability insurance as a prerequisite to obtaining a business license. Auto repossessors must purchase and maintain a $5,000 surety bond.
How Do DC Auto Repossessors File Their Bond?
Auto Repossessors should submit the completed bond form, including the power of attorney, electronically through the DCRA’s licensing portal. The surety bond requires signatures from both the surety company that issues the bond and a representative from the auto repossession company. The surety company should include the following information on the bond form:
- Legal name and address of entity/individual(s) buying the bond
- Surety company’s name
- Date the bond goes into effect
- Date the bond is signed
What Can DC Automobile Repossessors Do to Avoid Claims Against Their Bond?
In order to avoid claims made against their bond, automobile repossessors in DC must follow all license regulations in the district. Including some of the most important issues below that tend to cause claims:
- Ensure not to damage any property when repossessing a motor vehicle
- Do not engage in any acts of fraud
What Other Insurance Products Can Agents Offer Automobile Repossessors in DC?
DC does not require automobile repossessors to obtain any form of liability insurance. However, most reputable businesses will seek to obtain this insurance anyway. Bonds are our only business at BondExchange, so we do not issue liability insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.
How Can Insurance Agents Prospect for DC Automobile Repossessor Customers?
DC conveniently provides a public database to search for active automobile repossessors in the district. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.