South Dakota Motor Vehicle Dealer Bond
Required for motor vehicle dealers selling new or new and used vehicles in South Dakota. Protects consumers and the state from fraudulent business practices.
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About This Bond
The South Dakota Motor Vehicle Dealer Bond is a surety bond required by the State of South Dakota for businesses engaged in selling new motor vehicles or both new and used motor vehicles. This bond serves as a financial guarantee that the dealer will operate in accordance with state laws and regulations governing motor vehicle sales.
Motor vehicle dealers who sell new vehicles or a combination of new and used vehicles must obtain this bond as part of their licensing requirements. The bond ensures compliance with South Dakota's motor vehicle dealer statutes and provides protection for both consumers and the state.
The bond protects consumers who purchase vehicles from bonded dealers against fraudulent practices, misrepresentation, or failure to deliver clear title. It also protects the State of South Dakota by ensuring dealers follow proper business practices and maintain required records. If a dealer violates state regulations or engages in fraudulent activities, affected parties can file claims against the bond for financial compensation.
This bond has a one-year term and is renewable annually. The bond amount varies based on specific requirements determined by the state. Dealers must maintain continuous bond coverage to keep their license active and continue operating legally in South Dakota.
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1. Share the basics
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3. Get covered
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At a glance
South Dakota Auto Dealer Bond Key Facts
Governed by SDCL 32-6B-7.
The basics
What Is an Auto Dealer Bond in South Dakota?
Yes - South Dakota requires an auto dealer bond. Before the Department of Revenue’s Motor Vehicle Division issues a dealer license, you must file a surety bond that runs to the department (SDCL 32-6B-7). A motor vehicle dealer (new or used vehicles) posts a $25,000 bond. The amount is smaller for some license types - $5,000 for a motorcycle or off-road vehicle dealer, $10,000 for a trailer dealer, and $20,000 for a boat dealer.
Good to know - Required before the Motor Vehicle Division issues a South Dakota dealer license. The bond amount is set by license type: $25,000 for a motor vehicle dealer (new or used vehicles), $5,000 for a motorcycle or off-road vehicle dealer, $10,000 for a trailer dealer (trailers over 3,000 pounds), and $20,000 for a boat dealer. The bond runs to the department and must stay on file for the whole license period.
A surety bond is a promise, backed by a surety company, that you will follow South Dakota’s dealer laws. If you break them and a customer is harmed, that person can file a claim against your bond up to its full amount.
The bond protects the public, not you. It runs to the department and stands in favor of any customer who suffers a loss caused by a failure of title, a fraudulent misrepresentation, or a breach of warranty as to freedom from liens. If the surety pays a claim, you must repay the surety company.
South Dakota ties the bond to your license period: a new bond or a continuation certificate must be on file at the beginning of each period, and the surety must tell the department if it pays a claim or cancels. Keep the bond active the whole time you are licensed, and renew your license each year through the DMV Dealer System.
Qualification
What You Need to Qualify for a South Dakota 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 South Dakota dealer license - motor vehicle dealer, used vehicle dealer, motorcycle or off-road vehicle dealer, trailer dealer, or boat dealer - with the Department of Revenue, Motor Vehicle Division.
- You will file a surety bond in the amount South Dakota sets for your license type: $25,000 for a motor vehicle dealer (new or used), $5,000 for a motorcycle or off-road vehicle dealer, $10,000 for a trailer dealer, or $20,000 for a boat dealer.
- Your bond is written by a surety company qualified to do business in South Dakota and runs to the department (the State of South Dakota).
- You have an established place of business with zoning approval, a lease for that location if you do not own it, and - for a motor vehicle, used vehicle, or motorcycle dealer - at least $300,000 in public liability insurance.
- If you will sell new vehicles, you have a franchise or dealer agreement with the manufacturer or distributor.
- You can keep the bond continuous, delivering a new bond or a continuation certificate at the start of each license period, since the bond must be on file before your license is issued.
Step by step
How to Get an Auto Dealer Bond in South Dakota: Step by Step
Confirm your dealer license type and bond amount
Decide which South Dakota dealer license you need, because it sets your bond amount. A motor vehicle dealer (new or used) posts a $25,000 bond, a motorcycle or off-road vehicle dealer posts $5,000, a trailer dealer posts $10,000, and a boat dealer posts $20,000.
Review South Dakota’s dealer requirements
Read the Department of Revenue Dealer Manual and dealer licensing requirements. They explain the place-of-business, zoning, insurance, and recordkeeping rules you must meet, and how the Motor Vehicle Division reviews applications.
Dealer ManualGet your place of business and documents ready
Set up an established place of business and gather your supporting documents: zoning approval for the location, a lease if you do not own it, your certificate of public liability insurance, and a franchise or dealer agreement from the manufacturer if you will sell new vehicles.
Buy your South Dakota dealer bond
Buy your bond and we handle the paperwork. We issue your surety bond on the official South Dakota bond form for your license type and, in most cases, file it for you - there is no bond form for you to download, complete, or sign.
Complete your dealer license application
Fill out the South Dakota dealer license application with your business details and license type, and attach your bond, insurance certificate, zoning approval, and lease (if applicable). You can start and manage the application through the Department of Revenue Dealer Vehicle Licenses page and the DMV Dealer System.
Dealer License ApplicationSubmit your application, then renew each year
Submit your completed application, bond, and fees to the Motor Vehicle Division. Once licensed, renew each year through the DMV Dealer System - a renewal notice is sent before your license expires - and keep your bond continuous with a new bond or continuation certificate for each license period.
Paperwork
South Dakota Dealer Bond Forms & Documents
The Department of Revenue page to apply for and manage a South Dakota dealer license - you complete and submit this yourself.
View formOfficial summary of bond amounts, insurance, fees, and license types by dealer category.
View formThe Department of Revenue’s guide to dealer licensing requirements and the rules a licensed dealer must follow.
View formThe official South Dakota dealer bond form for your license type - we issue and file this for you; you do not fill it out yourself.
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Cost
How South Dakota Auto Dealer Bond Pricing Works
You do not pay the full bond amount. That figure - $25,000 for a motor vehicle dealer, or less for other license types - 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 South Dakota’s state license fees, such as the roughly $300 application fee and $175 annual renewal for a motor vehicle dealer.
Worked example
A South Dakota motor vehicle dealer bond is $25,000. 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
South Dakota Department of Revenue, Motor Vehicle Division - Dealer Licensing Program
Filing notes
Your surety bond must be on file before the Motor Vehicle Division issues your South Dakota dealer license (SDCL 32-6B-7). The bond runs to the department and protects any customer who suffers a loss from a failure of title, a fraudulent misrepresentation, or a breach of warranty as to freedom from liens.
We issue your bond on the official South Dakota dealer bond form for your license type and, in most cases, file it for you - there is no bond form for you to download, complete, or sign.
The bond is written for the license period. A new bond or a proper continuation certificate must be delivered to the department at the beginning of each license period, so keep coverage continuous. If the surety pays a claim or cancels the bond, it must notify the department in writing.
The completed bond, including the power of attorney, is submitted to the State of South Dakota Motor Vehicle Division, 445 East Capitol Avenue, Pierre, SD 57501, or filed through the DMV Dealer System per the Division’s current instructions.
FAQ
South Dakota Auto Dealer Bond FAQ
Yes. Before the Department of Revenue’s Motor Vehicle Division issues a dealer license, you must deliver a surety bond running to the department (SDCL 32-6B-7). The bond must be on file before your license is issued.
It depends on your license type: $25,000 for a motor vehicle dealer (new or used vehicles), $5,000 for a motorcycle or off-road vehicle dealer, $10,000 for a trailer dealer (trailers over 3,000 pounds), and $20,000 for a boat dealer.
No. We issue your bond on the official South Dakota dealer bond form for your license type and, in most cases, file it for you - there is no bond form for you to complete or sign.
You pay a premium, not the full bond amount. The premium is a small percentage of your bond amount, based mainly on your credit. Start a quote to see your rate.
The bond runs to the department and stands in favor of any customer who suffers a loss caused by a failure of title, a fraudulent misrepresentation, or a breach of warranty as to freedom from liens. It protects your customers and the state, not you.
The bond is written for your license period. A new bond or a proper continuation certificate must be delivered to the department at the beginning of each license period, so keep coverage continuous. You renew your dealer license each year through the DMV Dealer System.
An established place of business with zoning approval, a lease if you do not own the location, and at least $300,000 in public liability insurance for motor vehicle, used vehicle, and motorcycle dealers. If you sell new vehicles, you also need a franchise or dealer agreement, plus your application and state fees.
The South Dakota Department of Revenue, Motor Vehicle Division - Dealer Licensing Program, in Pierre. You can reach the Dealer Program at (605) 789-4694 or dealerprogram@state.sd.us.
Sources
Last verified 2026-07-01. Requirements change - confirm current details with South Dakota Department of Revenue, Motor Vehicle Division - Dealer Licensing Program before you file. This page is informational and not legal advice.
FAQ
South Dakota Auto Dealer Bond Questions
The cost of a South Dakota 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 South Dakota 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 South Dakota 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.
