$25,000 surety bond commonly required by Massachusetts city and town licensing authorities of Class I (new), Class II (used), and Class III (salvage) motor vehicle dealers under M.G.L. c. 140 §57–59.
Massachusetts is unusual in that motor vehicle dealer licenses are issued by cities and towns rather than the state. Each licensing authority sets its own bond requirements. The most common amounts:
| Class | Description | Typical Bond |
|---|---|---|
| Class I | New & Used Vehicle Dealer (franchised) | $25,000 (varies by city) |
| Class II | Used Vehicle Dealer | $25,000 (varies by city) |
| Class III | Salvage / Junk Vehicle Dealer | $10,000 – $25,000 |
Some larger municipalities (Boston, Worcester, Springfield) require higher amounts. Always verify with the specific city or town before applying.
The bond is required by the local licensing authority; the Massachusetts Registry of Motor Vehicles (RMV) does not directly impose the bond.
Premium is credit-driven and similar to other $25,000 bond states:
| Credit Profile | Annual Premium | Approx. Rate |
|---|---|---|
| Excellent Credit | $250 – $375 | 1% – 1.5% |
| Good Credit | $375 – $625 | 1.5% – 2.5% |
| Fair Credit | $625 – $875 | 2.5% – 3.5% |
| Credit Challenges | $875 – $1,000 | 3.5% – 4% |
| Past Credit Issues | $1,000 – $1,250+ | 4% – 5%+ |
Massachusetts dealer bonds run on 1-year cycles aligned with the city/town license. Each municipality maintains its own renewal schedule. Lapsed bonds result in city-level license suspension and inability to legally operate. Some towns also require annual public-notice renewal posting.
Massachusetts retained the colonial-era practice of municipal control over many commercial licenses. The state RMV registers dealer plates but does not license dealerships themselves.
Yes. Each city/town issues its own license, so relocating means applying for a new license (and possibly a new bond) in the new municipality.
No. The bond is filed only with the city/town licensing authority. The Massachusetts state government does not currently impose a separate dealer bond.
Some cities (notably Boston) require higher amounts. Confirm with the licensing authority and apply for the higher bond — the surety will scale your premium accordingly.
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