Florida Motor Vehicle Dealer Surety Bond Explained
A Motor Vehicle Dealer Surety Bond in the State of Florida is a financial guarantee required by the Florida Department of Highway Safety and Motor Vehicles (DHSMV) as part of the licensing process for motor vehicle dealers. The purpose of this bond is to protect consumers from fraudulent and deceptive practices by dealerships. The requirement for a surety bond is outlined in Florida Statutes, Chapter 320, specifically in Section 320.27. A bond is limited form of insurance to protect against certain violations of Florida statutes or agreements made between a buyer and a dealer. A bond is not obligated to cover a claimant’s attorney’s fees unless a surety bond has delayed a decision to a bond claim or improperly denied a claim.
What does the motor vehicle dealer surety bond cover?
A motor vehicle dealer surety bond is meant to cover a consumer’s damages arising from a dealership’s violations of Chapter 319 or Chapter 320 of the Florida Statutes. In addition, the surety bond also covers damages resulting from a dealership’s breach of a contractual agreement between the dealership and the consumer.
Some examples of covered claims under a dealer surety bond include:
Failure to Transfer Title: If the dealer fails to properly transfer the vehicle title to the consumer within the required timeframe.
Misrepresentation of Vehicles: If the dealer engages in deceptive practices, such as providing false information about the condition, mileage, or history of the vehicle.
Non-Delivery of Promised Services: If the dealership fails to provide services that were promised as part of the sale agreement.
Breach of Warranty: If the dealer offers an express written warranty and fails to honor the terms of the warranty.
In the event that a consumer is deceived by a car dealer and incurs financial losses due to the dealer’s actions, they may file a claim against the surety bond. If the claim is found to be valid, the surety company that issued the bond is responsible for compensating the harmed consumer up to the penal sum of the bond.
How much money is available?
The penal sum of any one Florida motor vehicle dealer surety bond is $25,000. The penal sum of the bond refers to the maximum amount of financial coverage provided by the bond. The penal sum acts as a financial safeguard for consumers who may be harmed by the actions of the dealership. Once the bond has been depleted by claims, there is no more money available to resolve any other claims made against the bond. This is why it is important to act fast to preserve your rights to recover from a motor vehicle dealer surety bond in Florida.
How can a consumer make a surety bond claim?
To make a claim without the assistance of counsel, a consumer must first file a complaint with the DHSMV. Once the DHSMV has completed its investigation and determined the dealership has violated Florida law, the consumer will be provided the surety bond certificate on file for the dealership. The consumer will then have to contact the surety bond holder to initiate a claim. Given that the amount of funds available to make a claim against are finite, it is in the best interest of a consumer to make a claim as soon possible in order to preserve their ability to recover from the surety bond.
As part of our initial due diligence, we routinely obtain surety bond disclosures from the DHSMV and will immediately make a claim against the bond to ensure the best chance at an optimal resolution to your claim. We are able to do so without the need for a DHSMV complaint determination of a violation of Florida law.
