Guide — the misunderstood number

Dealer bond basics: the face amount is not the price

The most expensive misunderstanding in dealer licensing is the bond. A state that requires a "$50,000 bond" is not asking you for $50,000. It is requiring a surety company to guarantee your compliance up to $50,000 — and you pay that company an annual premium for the guarantee.

The math

Premiums are a percentage of the bond amount, priced mostly on your personal credit and any prior claims:

Bond amount (set by your state)	At 1%	At 3%	At 10% (weak credit)
$25,000 (e.g. Florida)	$250/yr	$750/yr	$2,500/yr
$35,000 (e.g. Georgia)	$350/yr	$1,050/yr	$3,500/yr
$50,000 (e.g. TX, CA, NC, IL)	$500/yr	$1,500/yr	$5,000/yr
$75,000 (Ohio, since Apr 2026)	$750/yr	$2,250/yr	$7,500/yr

Illustrative percentages — your quote is individual. Ohio's BMV itself estimates $750–$2,250/yr for the $75,000 bond, which is the 1–3% band.

What moves your premium

Personal credit — the dominant factor. Sureties underwrite the owner, not just the business.
Bond size — set by your state and license type; you do not choose it.
Claims history — a paid claim must be reimbursed to the surety, and it follows you.
Experience and financials — some sureties ask, especially at higher bond amounts.

Questions to ask any surety

What is the premium, and is any part of it a one-time fee rather than annual?
Does the quote assume collateral? (A quote that requires you to post cash is a different product.)
What happens at renewal if my credit improves — will you re-price?
Will you file the bond on my state's exact form and send me the executed original my application needs?

Our position, plainly

DealerSteps does not sell bonds or insurance, and nothing here is insurance advice — this page is education about how the pricing works, so you can read a quote intelligently. Buy your bond from a licensed surety or agent of your choosing; where any link on this site ever points to a provider, it will be labeled as a referral.

Your state's exact bond — and where it tiers by volume — is on its state page. The Playbook's bond worksheet turns this into a one-page quote-comparison sheet. See the Playbook.