- February 28, 2017
- Posted by: Surety Bond Experts
- Category: Auto Dealer, Surety Bond
2017 is bound to bring lots of changes to many parts of our lives. One important change in the used auto dealer industry in New York, is that the cost of a surety bond will increase.
To recap, a surety bond is a contract between an obligee, surety bond producer and principal. It ensures that the principal will adhere to all industry regulations and any contractual obligations. If they do not, they will face a financial consequence. Here are some important things to remember:
- In order to get a license in the state of NY, a used auto dealership must have a surety bond.
- They also must submit an application to the Department of Motor Vehicles.
- Also, the used auto dealership must submit certain documentation. This includes the New York State Department of Taxation and Finance Certificate of Authority, proof of business name and Workers’ Compensation insurance.
- Be familiar with the New York Used Car Lemon Law. This law helps to protect customers. A “lemon” car is any car that is defective, due to improper repairs or maintenance.
- To be a “lemon” car, it must be two years old or older or the mileage is over 18,000.
- Furthermore, the car must be sold by a New York used auto dealership, driven 100,000 miles or less when it is sold and cannot be used for business.
- A written warranty must cover the engine, transmission, driver axle, brakes. Steering, radiator, alternator, generator, starter and the ignition system.
- If the car is defective, the used auto dealership will have a chance to correct the situation. The used auto dealership will have three or more repair attempts.
- But there is good news for the used auto dealership! If the car is defective because of abuse, neglect or unauthorized alterations by the customer, the “lemon” law does not apply.
- It is important to keep the Consumer Bill of Rights and consumer guide on hand to be familiar with the lemon law.
- Motor homes, off-road vehicles and classic cars are not covered under the lemon law
- If a used car dealer does not follow the warranty, the customer is given a full refund of the car’s sale price
- A copy of the Used Car Lemon Law Bill of Rights must be given to the customer at time of sale.
- An used auto dealership must inform the customer if the car was used as a police car, cab, rental or driver education vehicle.
- Bond amounts for used auto dealers will increase on April 8 2017.
- In previous years, a used auto dealer who sold less than 200 cars needed a $10,000 bond. If they sold more than 200 cars, the bond increased to $25,000.
Although this may seem like a lot to remember, we are here to help you with your surety bond needs.
Surety bonds help to promote good business faith. Obtaining a surety bond will protect your business, promote your reputation and open your business up to more clientele.
We here, at GotSuretyBonds.com are an independent bond-only agency, committed to the principles of service, integrity and professionalism. We view our clients, employees and underwriters as our “business family”. We strive to offer each and every one of them unsurpassed attention and support to ensure a mutually beneficial relationship. We have a keen understanding that success for everyone is only possible through helping all of our constituents achieve their goals and objectives, we believe that a truly satisfied customer, employee or vendor is the best business strategy of all. Our surety bonding services help create a blueprint for success. Our principals have relationships nationwide and have earned the trust of underwriters. Because of our credibility within the underwriting community and longevity in the industry, we are able to act as powerful advocates for our clients. We have a unique, tactical process to professionally design and present a thorough financial picture with risk and financial analyses to the surety market.