Hawaii Motor Vehicle Dealer Surety Bond

The Obligee:

The Hawaii Motor Vehicle Industry Board, Department of Commerce and Consumer Affairs is tasked with the licensing of motor vehicle dealers, is the obligee for the required surety bond and addresses consumer complaints. Motor vehicle dealers are required to apply for a license and obtain a surety bond.. A motor vehicle dealer can be a new vehicle dealer, a used vehicle dealer (also known as a car dealer or auto dealer), a motor vehicle auction dealer, used motorcycle dealer or motor scooter dealer.

Surety Bond and License Requirements:

Complete the application and pay the licensing fee (fees vary based on dealer type and island).

Provide a drawing and written description of the proposed dealership location, photographs of the show room, office, restrooms, exterior of the buidling (if sharing office space), and a copy of the lease or rental agreement.

Applicants must either establish a line of credit or obtain a surety bond. New car dealers need a line of credit of at least $500,000, while used car and motorcycle dealers must have a line of credit of $50,000, and auctions must have a $100,000 line of credit.

Motor Vehicle Dealers that are unable to obtain the appropriate credit have the alternative option to obtain a Surety Bond.

Bond amounts are:

Provide a financial statement (completed within the previous 12 months) that has been prepared and signed by a CPA. The name of the financial statement must match the applicant name. If applicable, partnerships must submit financial statement for each partner. If sole proprietor, attach an individual statement.

If using a trade or dba name, provide a file stamped copy of the Application for Registration of Trade Name.

If business is a corporation, partnership, limited liability company or limited liability partnership, provide a Certificate of Good Standing.

If a franchise, provide a signed copy of the Dealer's Sales and Service Agreement.

Complete salesperson applications or transfer forms (not applicable to sole proprietors or partnerships).

Applicants must be able to pass a criminal background check.

Dealerships without repair facilities must provide a certification letter as to which reputable facility will do repair work.

License and surety bonds renew June 30 of even numbered years.

How Much Does This Bond Cost?

The premium that you pay for a Hawaii Motor Vehicle Dealer Surety Bond is dependent on credit, the bond amount required and experience in the industry. Our rates start at 1% of the bond amount with good credit. Surety bond amounts over $50,000 will require business and personal financial statements.

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