October 15th, 2020

Wyoming Auto Dealer Bond: A Comprehensive Guide

wyoming auto dealer bond

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

At a Glance:

  • Average Cost: $150 – $1,250 per year based on the business owner’s credit
  • Bond Amount: $25,000
  • Who Needs It: All individuals and businesses that sell or deal in 3 or more motor vehicles in a 12 month period
  • 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 Wyoming: The Wyoming Department of Transportation (DOT)

Background

Wyoming Statutes 31-16-108 mandates auto dealers operating in the state to obtain a motor vehicle dealer license with the DOT. The Wyoming legislature enacted the license and regulations to ensure that dealers engage in ethical business practices and remit required taxes and fees. In order to provide financial security for the enforcement of the license law, dealers must purchase and maintain a $25,000 motor vehicle dealer surety bond to be eligible for licensure.

What is the Purpose of the Wyoming Auto Dealer Bond?

Wyoming requires dealers to purchase the Motor Vehicle Dealer Bond as part of the application process for the Motor 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 Wyoming. In short, the bond is a type of insurance that protects the public if the dealer breaks licensing laws.

wyoming auto dealer bond

Wyoming Vehicle Dealer Bond Form (MV-424)

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

BondExchange makes obtaining the Wyoming 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? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, 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.

How Much Does the Wyoming Auto Dealer Bond Cost?

The $25,000 Wyoming Motor Vehicle Dealer surety bond can cost anywhere between $150 to $1,250 per year. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. We also offer easy interest-free financing for premiums over $500. The chart below offers a quick reference for the approximate bond cost on the $25,000 bond requirement.


$25,000 Wyoming Auto Dealer Bond Cost

Credit Score* Bond Cost (1 year)
699+ $150
660 – 698 $170
649 – 659 $195
630 – 648 $250
620 – 629 $325
600 – 619 $500
550 – 600 $1,000
500 – 549 $1,250

*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 Wyoming Define “Motor Vehicle Dealer”?

To paraphrase Wyoming Statute 31-16-101, a motor vehicle dealer is anyone who buys, sells or exchanges 3 or more motor vehicles in a 12 month consecutive period. Exemptions to this definition include:

  • Any insurance, finance, public utility or any other person who sells or exchanges a motor vehicle as part of their regular business functions

How Do Dealers Apply for a Motor Vehicle Dealer License in Wyoming?

The process for applying for a motor vehicle dealer license in Wyoming is pretty complex. Below are the general guidelines, but dealers should refer to the Dealer Requirements Form for details on the process.

License Period – The Wyoming Dealer license expires one year from the effective date of the Motor Vehicle Dealer Bond and must be renewed before the expiration date

Step 1 – Determine the License Type

Wyoming requires dealers to obtain specific licenses corresponding to the nature in which the dealer’s business operates. Keep in mind that dealers will need to acquire a license for each type of business they wish to operate. Below are the different types of the Wyoming dealer license:

    • New Vehicle Dealer – Sells new or used motor vehicles
    • Used Vehicle Dealer – Sells used motor vehicles only (different licenses for if the dealer sells more or less than 12 retail motor vehicles a year
    • Manufacturer – Manufactures/distributes motor vehicles

Step 2 – Establish a Location

Dealers are required to establish a permanent place of business that meets the following minimum requirements:

    • Enclosed building used for commercial purposes only
    • Space to store required records
    • Landline telephone registered in the business’s name
    • Display space large enough for 5 motor vehicles (if you sell 12 or more a year)
    • Permanently affixed sign containing the nature of the business (auto sales, vehicle sales etc.) and is clearly visible from the street (Dealers who sell fewer than 12 motor vehicles annually must display their telephone number on the sign)

Step 3 – Obtain Zoning Approval

Dealers are required to obtain a letter of approval from their local zoning authority certifying that the dealer’s business location is in compliance with all applicable zoning regulations

Step 4 – Complete the Application

All new dealer regulatory license and renewal applications should be mailed to the following address:

WYDOT ATTN: Motor Vehicle Services
5300 Bishop Blvd.
Cheyenne, WY 82009-3340

Dealers can access the dealer license application here.

    • 4.a Pictures – Dealers must submit color photographs of their business location containing the building, sign and display lot (if required)
    • 4.b Lease/Ownership – Dealers must submit a copy of either their lease or ownership agreement with their application
    • 4.c Business Type – Dealers must register their business with the Wyoming Secretary of State and submit a copy of either their articles of incorporation or organization with their application.
    • 4.c FEIN – Dealers must submit their Federal Employer Identification Number to the DOT. Dealers can obtain an FEIN here.
    • 4.d Sales Tax – Dealers must submit a copy of their sales/use tax license with their application. Dealers can obtain a sales tax license here.
    • 4.e Franchise Agreement – Dealers selling new motor vehicles must submit a copy of their franchise agreement authorizing them to sell each make and model of new motor vehicle
    • 4.f Background Check – Dealers must submit a Background Check Questionnaire form for each individual listed on the application. Applicants must also contact their local law enforcement agency and obtain fingerprints for each applicant. There is a $39 fee per applicant associated with obtaining fingerprints.

Step 5 – Pay Fees

The following fees are associated with obtaining the Wyoming Dealer License:

    • $100 license fee for all dealers who sell 12 or more motor vehicles a year
    • $25 license fee for dealers who sell less than 12 motor vehicles a year
    • $100 license fee for manufacturers

Step 6 – Obtain Dealer Plates

After the dealer has obtained their license, they must present it to the County Treasurer in order to purchase Dealer Plates. Dealers who sell less than 12 motor vehicles a year are only eligible for one demo plate and no full use plate. The following fees are associated with purchasing dealer plates:

    • $25 fee for demo and manufacturer plates
    • $125 for full use plates

Step 7 – Purchase a Surety Bond

After the dealer is issued their license, they must then purchase and maintain a $25,000 surety bond. The dealer license period is congruent with the bond term.

How Do Wyoming Auto Dealers Renew Their License?

Dealers can renew their license by mailing the renewal application and all relevant documentation/fees to the following address:

WYDOT ATTN: Motor Vehicle Services
5300 Bishop Blvd.
Cheyenne, WY 82009-3340

The Wyoming Dealer license expires one year from the effective date of the Motor Vehicle Dealer Bond and must be renewed before the expiration date.

How Do Wyoming Auto Dealers File Their Bond?

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

WYDOT ATTN: Motor Vehicle Services
5300 Bishop Blvd.
Cheyenne, WY 82009-3340

The $25,000 surety bond all requires signatures from both the surety company that issues the bond and the auto dealer. The surety company should include the following information on the bond form:

  • Legal name, location and business type (corporation, LLC etc) of the entity/individual(s) buying the bond
  • Surety company’s name, address and signature
  • Date on which the bond will be executed and date it will expire
  • Date the bond is signed
  • Notary signature and seal for both the surety and principal
  • Signature of the Wyoming Assistant Attorney General

How Can Wyoming Auto Dealers Avoid Bond Claims?

To avoid claims on the 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
  • Pay taxes on time and in full. Dealers should consider setting aside tax obligations as they accrue.
  • Do not engage in any illegal selling practices

What Other Insurance Products Can Agents Offer Dealers in Wyoming?

Wyoming does not require dealers to obtain any form of liability insurance. Hwoever, most reputable dealers and towing or service stations should obtain garage liability insurance. 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. A list of brokers in this space can be found here.

How Can Insurance Agents Prospect for Wyoming Auto Dealer Customers?

Wyoming unfortunately does not display motor vehicle dealer information to the public. We suggest contacting a list service company or the Wyoming Secretary of State for a list of active motor vehicle dealers. Contact BondExchange for help developing a marketing piece. Agents can also leverage our print-mail relationships for discounted mailing services.

2020-10-15T21:16:13+00:00

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