Bond Motor Vehicle Dealer and/or Towable Recreational Vehicle Dealer
Required for motor vehicle dealers and towable recreational vehicle dealers operating in Iowa. Protects consumers from fraudulent practices and ensures compliance with state regulations.
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About This Bond
The Iowa Motor Vehicle Dealer and/or Towable Recreational Vehicle Dealer Bond is a $75,000 surety bond required by the Iowa Department of Transportation for businesses engaged in selling motor vehicles or towable recreational vehicles within the state.
Who Needs This Bond: All motor vehicle dealers and towable recreational vehicle dealers operating in Iowa must obtain this bond as part of their licensing requirements. This includes both new and used vehicle dealers who sell cars, trucks, motorcycles, trailers, RVs, and other towable recreational vehicles to consumers.
Protection Provided: This bond protects the State of Iowa and consumers from financial losses resulting from the dealer's failure to comply with state laws and regulations governing vehicle sales. It ensures dealers operate ethically, maintain proper records, handle titles correctly, and fulfill their obligations to customers and the state.
Bond Details: The bond has a one-year term and is renewable annually. The Iowa DOT requires the principal to sign the original bond form in ink - electronic signatures are not accepted. However, pre-executed forms are acceptable. The bond amount of $75,000 provides financial security for claims arising from violations of Iowa motor vehicle dealer regulations.
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At a glance
Iowa Auto Dealer Bond Key Facts
Governed by Iowa Code § 322.4 (surety bond).
The basics
What Is an Auto Dealer Bond in Iowa?
An Iowa auto dealer bond — officially a Motor Vehicle Dealer Bond — is a $75,000 surety bond you must file with the Iowa Department of Transportation (Iowa DOT) to get or renew a motor vehicle dealer license. It is a flat $75,000 for every dealer, whether you sell new, used, or wholesale vehicles. Iowa requires the bond under Iowa Code section 322.4.
Good to know - Required to get or renew an Iowa motor vehicle dealer license under Iowa Code section 322.4. The amount is a flat $75,000 for every motor vehicle dealer — new, used, and wholesale — and the same $75,000 applies to towable recreational vehicle dealers, so it does not change with your dealer type. You need a dealer license once you sell more than six vehicles in a 12-month period.
The bond is a promise that you will run your dealership honestly — that you will follow the state laws that regulate motor vehicle dealers and will not cheat your customers. The State of Iowa is the obligee, the party the bond answers to.
If you break those laws and cause someone a financial loss, that person can file a claim against your bond, up to the full $75,000. The bond protects your customers and the public, not you. If the surety company pays a claim, you must pay the surety back.
You need a dealer license once you sell more than six vehicles in a 12-month period. The bond must stay active the whole time you are licensed, and it must give the Iowa DOT at least 30 days notice before it can be cancelled.
Qualification
What You Need to Qualify for a Iowa 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, an Iowa motor vehicle dealer license with the Iowa DOT Office of Vehicle & Motor Carrier Services.
- You know your dealer type — new, used, or wholesale — even though every type files the same flat $75,000 bond.
- Your bond is written by a corporate surety licensed to do business in Iowa and runs to the State of Iowa.
- Your bond shows the exact legal name, ownership, and dealership location listed on your dealer license application.
- You can keep the bond active with no lapse for the whole time you are licensed.
- You have an established Iowa place of business — an office with a working business phone, a display area, and a repair facility.
- If you are applying for a used dealer license, at least one owner or officer has completed the 8-hour pre-licensing education class.
- You have a zoning letter from your local zoning authority showing your location is approved for a dealership.
Step by step
How to Get an Auto Dealer Bond in Iowa: Step by Step
Confirm you need an Iowa dealer license
You must be licensed once you sell more than six vehicles in a 12-month period. The bond amount is the same flat $75,000 for new, used, and wholesale motor vehicle dealers, so your dealer type does not change your bond.
Set up your Iowa place of business
Line up an established Iowa location that meets the state rules: an office with a working business phone and regular business hours, a display area, and a repair facility separated from the office and sales areas by floor-to-ceiling walls and solid doors. Get a zoning letter from your local zoning authority confirming the location is approved.
Complete your dealer license application
Fill out the Application for Motor Vehicle or Travel Trailer Dealer License (Form 417008) through the Iowa DOT online forms portal. Gather your supporting documents — your zoning letter, proof of business, and (for used dealers) your education class certificate.
Application for Motor Vehicle or Travel Trailer Dealer License (417008)Get your Iowa dealer bond
Buy your $75,000 bond and we handle the form. We issue your Iowa Motor Vehicle Dealer Bond on the official bond form and send it to you to file with your application. There is no bond form for you to download or sign.
File your application, bond, and fee
Submit your completed Form 417008, your issued $75,000 bond, your supporting documents, and the $70 license fee to the Iowa DOT Office of Vehicle & Motor Carrier Services. The license runs two years and expires December 31 of the next even-numbered year.
Keep your bond active
Renew your bond before it expires so your coverage never lapses — your Iowa dealer license depends on the bond staying on file. The bond must give the Iowa DOT at least 30 days notice before it can be cancelled.
Paperwork
Iowa Dealer Bond Forms & Documents
The official $75,000 dealer bond — we issue this for you on the official bond form and send it to you to file with your application. You do not download or complete it.
The dealer license application you complete and submit through the Iowa DOT online forms portal.
View formA letter from your local zoning authority confirming your location is approved for a motor vehicle dealership. You obtain and submit this.
For used dealer applicants — proof that an owner or officer completed the required class (managed by the Iowa Independent Automobile Dealers Association). You obtain and submit this.
You'll also need
Cost
How Iowa Auto Dealer Bond Pricing Works
You do not pay the full $75,000. Iowa sets the bond at a flat $75,000 for every motor vehicle dealer — that figure is the coverage, the most a claim can collect.
You pay a premium, which is a small percentage of the $75,000 bond amount. Underwriting sets your rate, mostly from your personal credit. The premium is separate from the $70 state license fee and the cost of the pre-licensing class.
Worked example
Iowa’s bond is a flat $75,000 whether you open a new-car franchise, a used car lot, or run a wholesale operation. You do not pay $75,000 — you pay a premium on it, often a small percentage of the amount for well-qualified applicants.
Filing
Filing Information
Iowa Department of Transportation (Iowa DOT), Office of Vehicle & Motor Carrier Services
Filing notes
Iowa names the State of Iowa as the obligee, and the bond protects the public. We issue your Iowa Motor Vehicle Dealer Bond on the official bond form for the required $75,000.
The bond must be written by a corporate surety licensed to do business in Iowa, and it must show the exact legal name, ownership, and dealership location listed on your dealer license application.
File the original bond with the Iowa DOT vehicle and motor carrier services bureau together with your Application for Motor Vehicle or Travel Trailer Dealer License (Form 417008) and fee. In most cases we send you the issued bond to include with your application packet.
Iowa Admin. Code 761—425 requires the bond to give the bureau at least 30 days notice before it can be cancelled. Keep your coverage active with no lapse — a cancelled or invalid bond puts your dealer license at risk, so renew on time.
FAQ
Iowa Auto Dealer Bond FAQ
Yes. Every motor vehicle dealer license applicant must file a $75,000 surety bond with the Iowa DOT under Iowa Code section 322.4. The bond runs to the State of Iowa.
It is a flat $75,000 for every motor vehicle dealer — new, used, and wholesale. The same $75,000 also applies to towable recreational vehicle dealers, so the amount does not change with your dealer type.
No. Unlike some states, Iowa uses one flat $75,000 bond for all motor vehicle dealers, whether you are a new, used, or wholesale dealer.
It protects your customers and the public, with the State of Iowa as the obligee. If a dealer breaks Iowa’s motor vehicle dealer laws and causes a financial loss, the harmed person can file a claim against the bond, up to the full $75,000.
You pay a premium, not the full $75,000. The premium is a small percentage of the bond amount, based mainly on your credit. Start a quote to see your rate.
It must stay active the whole time you are licensed, and it must give the Iowa DOT at least 30 days notice before it can be cancelled. Renew it before it expires so your coverage never lapses.
Besides the bond, you need an established Iowa place of business, a zoning letter, and an on-site facility inspection. Used dealer applicants must also complete an 8-hour pre-licensing education class before applying.
The Iowa Department of Transportation (Iowa DOT), Office of Vehicle & Motor Carrier Services. You can reach the office at (515) 237-3156 or vehicledealer@iowadot.us.
Sources
Last verified 2026-07-01. Requirements change - confirm current details with Iowa Department of Transportation (Iowa DOT), Office of Vehicle & Motor Carrier Services before you file. This page is informational and not legal advice.
FAQ
Iowa Auto Dealer Bond Questions
The cost of a Iowa 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 Iowa 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 Iowa 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.
