February 19, 2026
Dorsal Insurance
Motor Vehicle Dealer Bond in Florida
In Florida, obtaining a motor vehicle dealer bond is a mandatory step for licensing through the Florida Department of Highway Safety and Motor Vehicles (FLHSMV). This bond acts as a financial guarantee that your dealership will comply with state laws and fulfill contractual obligations to customers.
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Core Requirements
Most auto dealers in Florida are required to carry a $25,000 surety bond. The specific amount and form vary slightly by license type:
| License Type | Bond Amount | Required Form |
| Independent (Used), Wholesale, Auction, Salvage, Franchise | $25,000 | HSMV 86020 |
| Recreational Vehicle (RV) Dealer | $10,000 | HSMV 86019 |
| Mobile Home Dealer | $25,000* | HSMV 86018 |
Note: For Mobile Home and RV dealers, the bond requirement increases if you have more than four supplemental locations (e.g., the Mobile Home bond jumps to $50,000).
Estimated Costs
You do not pay the full $25,000. Instead, you pay an annual premium, which is a small percentage of the total bond amount. This rate is primarily determined by your personal credit score:
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Excellent Credit (700+): Generally 1% or less ($188 – $250 per year).
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Average Credit (600–699): Roughly 2% to 5% ($500 – $1,250 per year).
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Poor Credit (Below 600): Rates can exceed 5% ($1,250+), and some providers may require additional financial documentation.
Key Deadlines & Renewals
Florida bonds are not “one and done”; they must be renewed to keep your dealer license active.
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Used, Wholesale, and Auction Dealers: Bonds typically expire on April 30th each year.
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Franchise (New) Dealers: Bonds typically expire on December 31st each year.
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Cancellation: If you or the surety company cancels the bond, you must provide the FLHSMV with 30 days’ written notice. Failure to replace it immediately will result in an automatic license suspension.
Alternative: Letter of Credit
If you prefer not to use a surety company, Florida law allows you to submit an Irrevocable Letter of Credit (ILOC) using Form HSMV 86057. While this avoids premium payments, it typically requires you to tie up $25,000 of your own cash or credit line with your bank, which is why most dealers opt for the surety bond.
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