Utah Auto Dealer Bond

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Utah Auto Dealer Bond: A Comprehensive Guide

BondExhange 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.

This guide provides information for insurance agents to help new and pre-owned car dealership owners on Utah Auto Dealer bonds

At a Glance:

  • Lowest Cost: $100 per year or $10 per month
  • Bond Amount:
    • $75,000 for new or used motor vehicle dealers (most common)
    • $10,000 for motorcycle/small trailer dealers
    • $20,000 for body shops
    • $10,000 for crushers
  • Who Needs It: All dealers who seek to buy, sell, repair, salvage, manufacture or exchange motor vehicles either directly or indirectly
  • Purpose: To ensure the public will receive compensation for any damages should the auto dealer fail to comply with dealer licensing law
  • Who Regulates Dealers in Utah: The Utah Motor Vehicle Enforcement Division (MVED)
Utah Motor Vehicle Dealer Bond


Utah Code Title 41 Chapter 3 mandates auto dealers operating in the state to obtain a motor vehicle dealer license with the Utah MVED. The Utah legislature enacted the certificate and regulations to ensure that dealers engage in ethical business practices and remit required taxes and fees. To provide financial security for the enforcement of the certificate law, dealers must purchase and maintain either a $75,000, $20,000 or $10,000 auto dealer surety bond.

What is the Purpose of the Utah Auto Dealer Bond?

Utah requires dealers to purchase the Motor Vehicle Dealer Bond as part of the application process for the Vehicle Dealer License. The bond ensures that the public will receive compensation for financial harm if the auto dealer fails to comply with the licensing regulations and that the dealer will pay all required taxes and fees to the State of Utah. In short, the bond is a type of insurance that protects the public if the dealer breaks the licensing laws.

How Can an Insurance Agent Obtain a Utah Auto Dealer Bond?

BondExchange makes obtaining a Utah Auto Dealer Bond easy. Simply login to your account and use our keyword search to find the “auto dealer” 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, 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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How Much Does the Utah Auto Dealer Bond Cost?

The $75,000 Utah Auto Dealer surety bond can cost anywhere between $281 to $5,250 per year or $29 to $525 per month. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. We also offer monthly pay-as-you-go subscriptions for surety bonds. The chart below offers a quick reference for the approximate bond cost.

$75,000 Auto Dealer Bond Cost

Credit Score* Bond Cost (1 Year) Bond Cost (1 month)
749+ $281 $29
699 – 748 $563 $57
681 – 698 $750 $75
625 – 680 $1,125 $113
600 – 624 $1,688 $169
550 – 599 $4,688 $469
500 – 549 $5,250 $525

*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 Utah Define “Motor Vehicle Dealer”?

To paraphrase Utah Code Title 41 Chapter 3, a motor vehicle dealer is anyone who seeks to buy, sell, repair, salvage, manufacture or exchange 2 or more motor vehicles either directly or indirectly in a 12 month period. Exceptions to this definition include:

  • Insurance, financial, utility or any other company who comes into possession of motor vehicles as part of their regular business

Utah Auto Dealer Bond

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 Auto Dealers Apply for a License in Utah?

The process for applying for a motor vehicle dealer license in Utah is pretty complex, and each license type has its own specific set of requirements. Below are the general guidelines, but dealers should refer to the Bonded Motor Vehicle Business Application form for details on the process.

License Period – The dealer license expires on June 30th each year regardless of the date of issuance.

Step 1 – Determine the License Type

Utah requires dealers to obtain specific licenses corresponding to the nature in which the dealer’s business operates.The most common licenses are the New and Used Dealer Licenses allowing dealers to sell and dismantle new and used vehicles. Information on all 14 Utah Dealer Licenses can be found here.

Step 2 – Establish a Place of Business

Dealers operating in Utah must establish a business location that is in compliance with all local zoning regulations. The business location must meet the following requirements:

    • Be used solely to conduct business
    • Be bounded by fencing or other material that clearly indicates the boundaries of the business
    • Contain display space for at least three vehicles
    • Contain an office in an enclosed building
    • Have space for all business records and required documents
    • Must not share common space with another dealer

Step 3 – Erect a sign

Dealers must erect a permanent sign at their business location that meets the following requirements:

    • At least 24 square feet in size
    • Must be either painted on the dealership office, nailed/bolted to the dealership office or securely anchored to the ground in the display area
    • Show the business’s full name as listed on the dealer license

Step 4 – Purchase a Surety Bond

Dealers must purchase and maintain a surety bond in the following amounts based on their license type:

    • $75,000 for new or used motor vehicle dealers (most common)
    • $10,000 for motorcycle/small trailer dealers
    • $20,000 for body shops
    • $10,000 for crushers

Step 5 – Complete the Dealer Education Course

First time applicants must complete a state approved 8 hour orientation course prior to submitting their dealer application. A list of state approved courses can be found here.

Step 6 – Complete the Application

All new dealer regulatory certificate applications and dealer regulatory certificate renewal applications should be mailed to:

Motor Vehicle Enforcement Division
210 North 1950 West
Salt Lake City, Utah 84134

Dealers can find the application form here.

    • 6.a Photographs – Dealers must submit passport quality photos of all owners, partners or corporate officers as part of their application. Dealers must also submit photographs of their sign and business location.
    • 6.b Fingerprints – All owners, partners or corporate officers must submit a standard fingerprint card with their application. Dealers must also submit a waiver form located here.
    • 6.c Sales Tax License – Dealers must acquire a sales tax license to become licensed. The form to apply for a sales tax license can be found here.
    • 6.d Franchise Agreement – Dealers who sell new vehicles must obtain a letter from a manufacturer or distributor granting them permission to sell new vehicles
    • 6.e Business Name – All dealers must file their trade names with the Utah Department of Commerce. Dealers can file their names by contacting the DOC at 801-530-4849
    • 6.f Dealer Plates – Dealers can request up to five initial dealer plates on their application. Dealers can apply for one additional plate for every twenty five vehicles sold
    • 6.g Insurance – All dealer plates are required to have plate insurance. Plate insurance covers any accidents that occur when the vehicle is being test driven or is outside of the business location

Step 7 – Pay Fees

Dealers must pay the following fees to obtain their dealer license:

    • $127 for new or used dealers
    • $127 for special equipment dealers
    • $51 for motorcycle, OHV or small trailer dealers
    • $12 for each dealer plate (plus a handling fee)
    • $20 for each set of fingerprints submitted

How Does a Utah Motor Vehicle Dealer Renew Their License?

The Motor Vehicle Dealer License expires June 30th of each year and must be renewed before the expiration date. Dealers can renew their license online at the Utah Motor Vehicle Portal located here.

What Are the Insurance Requirements for the Dealer License?

The State of Utah requires all licensed dealers to obtain plate insurance on all vehicles with dealer plates. Dealers must also file either a $75,000, $20,000 or $10,000 auto dealer surety bond.

How Do Utah Auto Dealers File Their Bond With the MVED?

The $75,000, $20,000 and $10,000 surety bonds all require signatures from both the surety company that issues the bond and the auto dealer. The bond form will require the following items:

  • Legal name of entity/individual(s) buying the bond
  • Physical address where the business will operate
  • Surety company’s name, address and signature
  • Date on which the bond is sealed

Dealers should mail the completed bond form, including the power of attorney, to the following address:

Motor Vehicle Enforcement Division
210 North 1950 West
Salt Lake City, Utah 84134

What Can Dealers Do to Avoid Claims Against the Utah Auto Bond?

To avoid claims on the Utah Motor Vehicle Dealer Bond, dealers must follow all dealer regulations in the state, including some of the most important issues below that tend to cause claims:

  • Do not engage, or allow representatives of the business to engage, in any acts of fraud
  • Pay sellers of vehicles promptly and in full
  • Adhere to the dealer certificate plate regulations approved by the state

What Other Insurance Products Can Agents Offer Dealers in Utah?

Utah requires dealers to obtain plate insurance on all vehicles with dealer plates. Plate insurance covers accidents that occurred while the vehicle is not on the business location. Dealers that provide towing or service station services should also obtain garage keepers liability. Bonds are our only business at BondExchange, so we do not issue any form of liability insurance, but our agents often utilize brokers for this specific line of business.

How Can Insurance Agents Prospect for Utah Motor Vehicle Dealer Customers?

Insurance agents can contact the Utah MVED here to request a list of licensed dealers. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.

What Other States Require Auto Dealer Bonds?

All 50 states and the District of Columbia require auto dealers to obtain an Auto Dealer Bond as a prerequisite for licensure. Insurance agents should utilize our Main MVD Page for a detailed analysis of the Auto Dealer Bond requirements nationwide.

Utah Auto Dealer Bond