Florida Dealer Bond Quotes – 2017 Renewals
Florida used car dealer bonds have a mandatory renewal date of May 1st of each year. This means you’ve probably been getting several cold calls over the past few weeks regarding your bond. Right now you’re probably being offered deals that no one else can match and experiencing all of the fun high pressure sales tactics that come out of low quality agencies. It’s fun right? Well, here’s a little more information about the Florida dealer bond market that can help you fend off those pesky calls. Please note this article only applies to Florida dealer bond quotes not those auto dealer bonds for other states.
How do I apply for a dealer bond in Florida?
Applying for your car dealer bond is easy. Choose your bond type from the drop down list below then click “Get Your Bond Quote”.
Most quotes are approved as soon as your application is received.
How much will my dealer bond cost this year?
The answer depends on your credit score for the most part. However, the dealer bond market is incredibly soft right now in terms of pricing. This means that you’ll most likely pay less for your bond this year even if your credit is roughly the same. We’re seeing bonds that went for $2250 last year being quoted for $225 this year.
What’s causing my dealer bond price to drop?
Competition. Surety companies are becoming increasingly competitive for this bond type. Generally, you’ll find that as one surety company lowers their rate others will soon follow. Each surety company has their own underwriting requirements but we’re seeing some of those waived in order to win your business. In fact, some surety companies don’t make you sign an indemnity agreement. This let’s you get your bond immediately after paying your bond premium.
What’s a multiyear term and how can it save me money?
You’ve probably heard about a multiyear term from one of your recent cold calls. A 2 or 3 year prepaid bond premium can save you up to 20% of your bond cost. Surety companies will discount the second and third year bond costs if you’re willing to pay for the entire 2-3 year term up front. What the other agents don’t tell you is that these bonds are still underwritten each year. So what does that mean for you? Let’s say you have an unfortunate event which lands you in the hospital. Let’s also assume that you can’t afford to pay the medical bills and it lowers your credit score. Your surety company actually raise your price at renewal even though you’ve already prepaid the term. They also have the ability to cancel your bond upon renewal even if the second term has been prepaid.
Now, if your bond is non-renewed after prepaying for a multiyear term, the surety company will refund the second and/or third year’s prepaid premium. You can use this refund and apply it to another quote or, if the bond is too expensive, you can keep the refund and give up your dealer license. While it’s ultimately your choice, we don’t recommend prepaying a two or three year bond term unless your quote is $250 or less.
Why could it be a bad idea to prepay for a multiyear term?
In some cases, prepayment makes sense. For example: It makes sense to take advantage of the discount if you’re an existing dealership and are paying between $225 and $250 a year for your bond. However, if you’re paying $450 or more per year, it probably doesn’t make sense to purchase a 2 or 3 year prepaid bond. Why? Well, what happens if your credit improves? Your bond cost should decrease! You’re in effect loaning the surety company about $400 and banking that your credit score won’t improve. We’re not quite sure why you would bet that your credit score won’t improve but understand there are times when it may make sense.
Questions about your dealer bond?
Contact us today for a free competitive quote or general questions about the auto dealer bond market.