Motor Vehicle Dealer Continual Bond
Required for motor vehicle dealers in Vermont to obtain and maintain their dealer license. Bond amount varies from $20,000 to $35,000 based on annual vehicle sales volume.
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About This Bond
The Motor Vehicle Dealer Continual Bond is a surety bond required by the State of Vermont for businesses engaged in selling new or new and used motor vehicles. This bond serves as a financial guarantee that dealers will comply with state regulations and conduct business in accordance with Vermont motor vehicle dealer laws.
Who Needs This Bond: All motor vehicle dealers operating in Vermont who sell new vehicles or both new and used vehicles must obtain this bond to secure and maintain their dealer license. The bond is mandatory for license issuance and ongoing compliance.
Bond Protection: This bond protects the State of Vermont and consumers from financial losses resulting from a dealer's violation of state motor vehicle laws, fraudulent practices, or failure to fulfill contractual obligations. If a dealer engages in prohibited activities or fails to meet legal requirements, claims can be filed against the bond to compensate affected parties.
Coverage Details: Bond amounts are determined by the dealer's sales volume from the previous year: new dealer applicants require $35,000; dealers selling fewer than 25 vehicles need $20,000; those selling 25-100 vehicles need $25,000; dealers selling 101-250 vehicles require $30,000; and those selling 251 or more vehicles need $35,000. The bond has a one-year term and is renewable annually to maintain continuous coverage and license validity.
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At a glance
Vermont Auto Dealer Bond Key Facts
Governed by 23 V.S.A. § 453.
The basics
What Is an Auto Dealer Bond in Vermont?
Yes — Vermont requires a motor vehicle dealer bond to get or renew a dealer’s certificate of registration. Under 23 V.S.A. § 453, the Commissioner of Motor Vehicles will not register a new or used vehicle dealer unless the dealer files a surety bond, a letter of credit, or a certificate of deposit of $20,000 to $35,000. Vermont calls this form the Motor Vehicle Dealer Bond (VD-114).
Good to know - Required for every Vermont dealer in new or used motor vehicles. The Commissioner of Motor Vehicles sets your exact amount — between $20,000 and $35,000 — from a schedule based on how many new or used vehicles you sold the previous year. Vermont also accepts a letter of credit or a certificate of deposit in the same amount instead of a surety bond.
The bond is a promise backed by a surety company. It protects the State of Vermont and vehicle buyers if you collect fees or taxes on a sale and fail to send them to the DMV. If that happens, the State or a buyer can file a claim against your bond.
Vermont law limits claims to the fees or taxes you collected but did not remit under Title 23 (chapters 7 and 21) or the purchase and use tax law (32 V.S.A. chapter 219). The bond does not protect you — if the surety pays a claim, you must pay the surety back.
Your amount is between $20,000 and $35,000, set by the Commissioner from a schedule based on how many vehicles you sold the year before. You can meet the requirement with a surety bond, a letter of credit, or a certificate of deposit; most dealers use a surety bond because it is simpler and costs less up front.
Qualification
What You Need to Qualify for a Vermont 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 Vermont dealer’s certificate of registration for new or used motor vehicles through the DMV.
- You know your required bond amount — between $20,000 and $35,000, set by the Commissioner from a schedule based on how many vehicles you sold in the previous year.
- Your bond is written by a surety company authorized to do business in Vermont.
- You can keep coverage continuous — Vermont’s dealer bond must stay in effect for the registration year and one year after.
- You have your business details ready (legal business name, ownership, Federal EIN or date of birth, and Vermont business location) for the application and bond forms.
Step by step
How to Get an Auto Dealer Bond in Vermont: Step by Step
Confirm your dealer bond amount
Vermont sets your Motor Vehicle Dealer Bond between $20,000 and $35,000 based on the number of new or used vehicles you sold the previous year, using a schedule set by the Commissioner. Check your required amount before you buy so your registration is not delayed.
Get your dealer bond
Buy your bond and we handle the paperwork. We issue your Vermont Motor Vehicle Dealer Bond on the official form — VD-114, or the continual bond VD-114a for continuous coverage — and give you the signed original to file with your dealer application. There is no bond form for you to download or complete.
Complete your Dealer Application (VD-008)
Fill out the Vermont Dealer Application to register as a new or used vehicle dealer and request your dealer plates. Include your legal business name, ownership, Federal EIN (or date of birth for an individual), and your Vermont business location.
Dealer Application (VD-008)File your application and bond with the DMV
Submit your completed VD-008, your dealer bond, and your fees to the DMV Business Services Unit at 120 State Street, Montpelier. You can mail or hand-deliver the packet. We make sure your bond is on file so your certificate of registration can be issued.
Renew and keep coverage continuous
Vermont dealer registration renews each year. Your bond must stay in effect for the registration year and one year after, so renew before it lapses. The renewal packet uses forms VD-006, VD-007, VD-114, and the continual bond VD-114a.
Paperwork
Vermont Dealer Bond Forms & Documents
The application to register as a Vermont new or used motor vehicle dealer and request dealer plates.
View formThe dealer surety bond form — we issue and provide this for you to file with your dealer application.
View formThe continuous, no-lapse version of the dealer bond — we issue this for you to keep coverage from lapsing at renewal.
View formYou'll also need
Cost
How Vermont Auto Dealer Bond Pricing Works
You do not pay the full bond amount. The $20,000 to $35,000 figure is the coverage — the most a claim can collect. You pay a premium, which is a small percentage of that amount.
Your premium is set by underwriting, mainly your personal credit. Well-qualified applicants pay a low rate; higher-risk applicants pay more. The premium is separate from your Vermont dealer registration and plate fees.
Worked example
If the DMV sets your dealer bond at $25,000, you do not pay $25,000 — you pay a premium, often a small percentage of that amount for well-qualified applicants. Start a quote to see your rate.
Filing
Filing Information
Vermont Department of Motor Vehicles (DMV) — Enforcement & Safety Division, Business Services Unit
Filing notes
Your Motor Vehicle Dealer Bond (form VD-114, or the continual bond VD-114a) must be on file with the DMV before your dealer’s certificate of registration is issued.
Coverage must stay continuous. Vermont law requires the bond to remain in effect for the registration year and one year after, so renew before it lapses — the continual bond (VD-114a) is built to avoid a gap.
We issue your bond and provide the signed original (or the continual bond) for you to include with your VD-008 dealer application. Mail or hand-deliver the packet to DMV Business Services in Montpelier.
FAQ
Vermont Auto Dealer Bond FAQ
Yes. Under 23 V.S.A. § 453, the Commissioner of Motor Vehicles will not register a new or used vehicle dealer unless the dealer files a surety bond, letter of credit, or certificate of deposit of $20,000 to $35,000.
Between $20,000 and $35,000. The Commissioner sets your exact amount from a schedule based on how many new or used vehicles you sold the previous year.
It protects the State and vehicle buyers if you collect fees or taxes on a sale and do not send them to the DMV. Claims are limited to the unremitted fees or taxes you collected under Title 23 and the purchase and use tax law.
Form VD-114 (Motor Vehicle Dealer Bond), or VD-114a (Motor Vehicle Dealer Continual Bond) for continuous, no-lapse coverage. We issue the bond for you — there is no bond form for you to fill out.
Yes. Vermont also accepts a letter of credit or a certificate of deposit in the same amount. Most dealers choose a surety bond because it is simpler and costs less up front.
Bonds are commonly written for a 1, 2, or 3 year term, subject to approval. By law the bond must stay in effect for the registration year and one year after, so keep coverage continuous and renew on time.
With the DMV Business Services Unit, 120 State Street, Montpelier, VT 05603-0001. You can mail or hand-deliver your VD-008 application, bond, and fees. Questions: 802-828-1443, or the Dealer Processing Clerk at 802-828-2038.
Apply through a surety authorized in Vermont. Approval and your premium depend mainly on your credit. Have your business name, ownership, EIN or date of birth, and Vermont location ready.
Sources
Last verified 2026-07-02. Requirements change - confirm current details with Vermont Department of Motor Vehicles (DMV) — Enforcement & Safety Division, Business Services Unit before you file. This page is informational and not legal advice.
FAQ
Vermont Auto Dealer Bond Questions
The cost of a Vermont 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 Vermont 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 Vermont 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.
