Indiana Vehicle Merchandising Bond, Motor Vehicle Dealer
Required for motor vehicle dealers selling new or new and used vehicles in Indiana. Protects consumers and the state from fraudulent business practices.
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About This Bond
The Indiana Vehicle Merchandising Bond is a surety bond required for motor vehicle dealers who sell new vehicles or both new and used vehicles in the state of Indiana. This bond ensures that dealers comply with state regulations and operate their businesses ethically and legally.
Motor vehicle dealers engaged in the sale of new vehicles or combined new and used vehicle sales must obtain this bond as part of their licensing requirements with the State of Indiana. The bond serves as a financial guarantee that the dealer will conduct business in accordance with Indiana's motor vehicle dealer laws and regulations.
This bond protects both consumers and the State of Indiana from financial losses resulting from the dealer's fraudulent, dishonest, or unethical business practices. If a dealer violates state laws or fails to fulfill their obligations to customers, affected parties can file claims against the bond for compensation up to the bond amount.
The Indiana Vehicle Merchandising Bond has a coverage amount of $25,000 and operates on a one-year term. The bond is renewable annually, and dealers must maintain continuous coverage to keep their licenses active and remain in compliance with state requirements.
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At a glance
Indiana Auto Dealer Bond Key Facts
Governed by Ind. Code 9-32-11-2.
The basics
What Is an Auto Dealer Bond in Indiana?
Yes — Indiana requires an auto dealer bond. To get or keep a license from the Indiana Secretary of State, Auto Dealer Services Division, you must file a $25,000 surety bond made in favor of the State of Indiana. Indiana calls it the vehicle merchandising bond, or simply the "Indiana Dealer Bond" (State Form 53966), and it applies to new, used, wholesale, auction, and automotive mobility dealers alike.
Good to know - Required for every Indiana dealer license issued by the Auto Dealer Services Division. The bond is a flat $25,000 — the amount is the same whether you are a new, used, wholesale, auction, or automotive mobility dealer, and it must be made in favor of the State of Indiana.
The bond runs to the State of Indiana. It guarantees that you follow the dealer laws in Indiana Code Title 9, Article 32. If you break those laws and harm a customer or the state, the harmed party can file a claim against your bond for up to $25,000.
The bond protects the public and the state — not you. If a claim is paid, you must repay the surety company. The bond is required on top of your license fee, and it must stay active the entire time you hold your dealer license.
Qualification
What You Need to Qualify for a Indiana Auto Dealer Bond
Approval depends on your dealer license type, required coverage amount, and underwriting factors such as credit.
- You are applying for, or renewing, a license issued by the Indiana Secretary of State, Auto Dealer Services Division (for example a new, used, wholesale, auction, or automotive mobility dealer).
- You will file a $25,000 vehicle merchandising bond made in favor of the State of Indiana — the amount is the same for every dealer type.
- Your bond is written by a surety company authorized (admitted) to do business in Indiana.
- You have an established place of business in Indiana that meets state rules — at least 1,300 sq. ft., room to display 10 vehicles, open at least 30 hours a week, and not a private residence.
- You have a passed background check that is less than 60 days old and a zoning affidavit signed by a zoning official within the last 90 days.
- You have your business registered with the state (INBiz) and a certificate of insurance in the business name.
- You can keep coverage continuous and renew your license and bond on time each year so neither one lapses.
Step by step
How to Get an Auto Dealer Bond in Indiana: Step by Step
Choose your dealer license type
Decide which Auto Dealer Services Division license you need — for example new, used, wholesale, auction, or automotive mobility dealer. You need a dealer license if you sell or offer for sale at least 12 vehicles in a 12-month period. The bond is $25,000 no matter which dealer type you choose.
Set up a qualifying place of business
Line up an established place of business in Indiana that is not a private residence. It must be at least 1,300 sq. ft. with room to display 10 vehicles, open at least 30 hours a week, well lit, and have a permanent sign in the license name and customer parking.
Buy your $25,000 dealer bond
Buy your bond and we handle the paperwork. We issue your $25,000 vehicle merchandising bond on the current official Indiana form (State Form 53966) and provide it for filing with your application — there is no bond form for you to download, complete, or sign.
Gather your supporting documents
Collect the documents the Division requires: a passed background check less than 60 days old, your business entity registration (INBiz), a certificate of insurance, and a zoning affidavit signed by a zoning official within the last 90 days.
Zoning Affidavit (State Form 55936)Apply online and pay the license fee
Submit your dealer license application online through the Indiana Dealer Licensing portal at dealers.sos.in.gov, upload your bond and supporting documents, and pay the state license fee. Incomplete applications are held and delay your license.
Vehicle Dealer and Automotive Mobility License ApplicationRenew each year
Indiana dealer licenses and bonds are renewed on a set cycle. Renew on time each year so your coverage stays continuous and your license does not lapse. If your bond is canceled, coverage ends when your license terminates.
Application for Dealer License Renewal (State Form 56301)Paperwork
Indiana Dealer Bond Forms & Documents
The official $25,000 dealer bond form — we issue and provide this for you; you do not fill it out yourself.
View formFiled online at dealers.sos.in.gov. The New or Used dealer page lists every required document.
View formSigned by a local zoning official within 90 days of the date you submit your application.
View formUsed to renew your dealer license each year and keep your bond on file.
View formYou'll also need
Cost
How Indiana Auto Dealer Bond Pricing Works
You do not pay the full $25,000. That figure is the coverage — the most a claim can collect. You pay a premium, which is a small percentage of the bond amount.
Your premium is set by underwriting, mostly your personal credit. Well-qualified applicants pay a low rate; higher-risk applicants pay more. The premium is separate from the state license fee.
Worked example
Indiana requires a $25,000 dealer bond, but you do not pay $25,000 — you pay a premium, often a small percentage of the bond amount for well-qualified applicants. Your exact rate depends on underwriting, mainly your credit. Start a quote to see your price.
Filing
Filing Information
Indiana Secretary of State — Auto Dealer Services Division
Filing notes
Your $25,000 vehicle merchandising bond (State Form 53966) must be on file with the Auto Dealer Services Division as part of your license application — the Secretary of State cannot issue your license without it.
The bond is made in favor of the State of Indiana and must be written by a surety authorized in Indiana. It runs continuously: the surety can only end it by giving the Secretary of State 30 days written notice, and cancellation takes effect when your dealer license terminates.
We issue your bond on the current official Indiana form and provide it for filing with your online application at dealers.sos.in.gov — there is no bond form for you to complete. Keep coverage continuous and renew each year so your dealer license does not lapse.
FAQ
Indiana Auto Dealer Bond FAQ
Yes. Every applicant for a license from the Indiana Secretary of State, Auto Dealer Services Division must file a $25,000 vehicle merchandising bond made in favor of the State of Indiana before the license is issued (IC 9-32-11-2).
It is a flat $25,000. The amount is the same whether you are a new, used, wholesale, auction, or automotive mobility dealer.
The vehicle merchandising bond, filed on State Form 53966 (the "Indiana Dealer Bond"). We issue this bond for you and provide it for filing — there is no bond form for you to complete.
You pay a premium, not the full $25,000. The premium is a small percentage of the bond amount, based mainly on your credit. Start a quote to see your rate.
The bond is filed with the Auto Dealer Services Division as part of your online license application at dealers.sos.in.gov. It is made in favor of the State of Indiana.
Yes. The $25,000 bond must be on file with the Auto Dealer Services Division as part of your application before the Secretary of State issues your dealer license.
The bond runs continuously. The surety can only end it by giving the Secretary of State 30 days written notice, and cancellation takes effect when your dealer license terminates. Renew on time each year so coverage does not lapse.
The Indiana Secretary of State, Auto Dealer Services Division, in Indianapolis. You can reach them at (317) 234-7190 or dealers@sos.in.gov.
Sources
Last verified 2026-07-01. Requirements change - confirm current details with Indiana Secretary of State — Auto Dealer Services Division before you file. This page is informational and not legal advice.
FAQ
Indiana Auto Dealer Bond Questions
The cost of a Indiana auto dealer bond is usually a small percentage of the state-required bond amount. Your exact premium depends on the bond amount, license type, business details, and underwriting factors such as credit.
Many auto dealer bonds can be issued the same day after you complete the application. Larger bond amounts or applications that need underwriting review may take longer.
Requirements vary by license type, but most Indiana auto dealers need to complete a short application and purchase the bond amount required by the state before their license can be issued or renewed.
Often, yes. Many states have separate bond requirements for wholesale, retail, broker, or other dealer license types. Choose the bond that matches your Indiana license instructions.
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AutoDealersBond.com is operated by Shield Liability Insurance Agency, a California and Texas licensed insurance agency (CA License #6018195, TX License #3446536). Shield Liability Insurance Agency is not an insurance carrier and does not underwrite bonds or insurance policies. Bond and coverage availability, pricing, and issuance are subject to carrier underwriting approval, eligibility, applicable state requirements, and policy or bond terms. Availability varies by state.
