Typical Premium
$200–$1,000/yr
Required By
PA State Board of Vehicle Manufacturers, Dealers, and Salespersons
What Is the Pennsylvania Motor Vehicle Dealer Bond?
Pennsylvania's Board of Vehicle Manufacturers, Dealers, and Salespersons requires every licensed dealer (new or used vehicles) to maintain a $20,000 surety bond as a condition of license issuance and renewal under 63 P.S. §818.5(b).
The bond protects:
- Retail buyers harmed by undisclosed liens, title issues, or odometer fraud
- The Pennsylvania Department of Transportation (PennDOT) for sales tax not remitted
- Lienholders for unsatisfied trade-in liens
- Persons damaged by violations of the Board of Vehicles Act
Who Needs This Bond in Pennsylvania?
- New vehicle dealers (franchised manufacturer dealers)
- Used vehicle dealers
- Wholesale dealers — dealer-to-dealer sales only
- Public auctions selling motor vehicles
- Trailer dealers, motorcycle dealers, and boat dealers licensed under the same Act
How Much Will the Bond Cost?
Premiums are credit-based; most established dealers with clean credit pay near the floor of the range:
| Credit Profile | Annual Premium | Approx. Rate |
|---|
| Excellent Credit | $200 – $300 | 1% – 1.5% |
| Good Credit | $300 – $450 | 1.5% – 2.25% |
| Fair Credit | $450 – $700 | 2.25% – 3.5% |
| Credit Challenges | $700 – $900 | 3.5% – 4.5% |
| Past Credit Issues | $900 – $1,000+ | 4.5% – 5%+ |
How to Get Bonded — Step by Step
- Apply for your bond using the form on this page.
- Underwriting — soft credit pull, same-day quote in most cases.
- Pay premium & receive bond. Original signed bond delivered for filing with your state license application.
- Submit license application to the PA State Board, including bond, garage liability proof, and lease/zoning verification.
- Receive license from the Board upon approval.
Renewal & Continuous Bond Coverage
Pennsylvania dealer bonds run on a 1-year term and renew with the dealer license. The Board sends renewal notices about 60 days before expiration. Failure to maintain a current bond results in license suspension and loss of authority to sell or transfer titles.
Frequently Asked Questions
Is one bond enough for multiple PA locations?
Generally one $20,000 bond covers the licensed dealer entity. Additional locations may require separate license filings (and possibly riders); confirm with the Board when adding new locations.
Does PennDOT require a separate bond for title work?
No — the State Board dealer bond covers PennDOT-related claims for unremitted sales tax and improper title transactions.
What's the most common claim against a PA dealer bond?
Failure to deliver title within the statutory window after sale, and failure to satisfy a prior lien on a trade-in vehicle.
Can I use a cash deposit instead of a surety bond?
The PA State Board permits a cash deposit or letter of credit in lieu of a surety bond, but a surety bond is far more cost-effective — you pay $200–$1,000 a year vs. tying up $20,000 in cash.
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Related: All Pennsylvania surety bonds ·
What is a surety bond? ·
How surety bond costs are calculated
Underwriting Disclosure.
All surety bond applications are subject to underwriting review and approval by the issuing surety company. Quoted premiums are estimates only; final pricing is determined by individual underwriting factors, which may include personal and business credit history, financial statements, industry experience, and claims history. Many bonds qualify for instant online approval, while others may require additional documentation, financial review, or indemnitor signatures prior to issuance. SuretyBondly makes no representation, warranty, or guarantee of approval, eligibility, premium amount, bond form, or issuance timing. Bond amounts, forms, and requirements are governed by the applicable obligee and statutory authority and may change without notice. Information provided on this page is for general informational purposes only and does not constitute legal, financial, or tax advice.