General information, not legal advice. Whether any step described here helps or hurts a claim depends on your facts, your contract, and your deadlines. Nothing on this site tells you what to do in your situation; an attorney who has reviewed your documents can.
Surety bonds
Every licensed car dealer in Florida has to post a $25,000 surety bond before it can sell a single vehicle. When a dealer cheats you and can't or won't pay, a Florida motor vehicle dealer surety bond claim is often the fastest route to real money, and sometimes the only one, particularly when the dealer has closed its doors. This post covers what the bond covers, who can claim against it, how a claim is made, and why timing matters more here than anywhere else in Florida auto fraud litigation.
What Is a Florida Motor Vehicle Dealer Surety Bond?
Section 320.27(10), Florida Statutes, requires every applicant for a motor vehicle dealer license to deliver to the Florida Department of Highway Safety and Motor Vehicles a surety bond in the amount of $25,000 before a license is issued or renewed. The bond is written by a surety company, runs to the department, and is expressly in favor of any person in a retail or wholesale transaction who suffers a loss because the dealer violated its conditions.
The bond is not insurance for the dealer. It exists to protect the public. If the dealer breaches a written contract made in the sale or exchange of a vehicle, or violates chapter 319 or 320 in the conduct of its business, the surety pays the injured consumer up to the bond's penal sum and then pursues the dealer for reimbursement. Read the statute at flsenate.gov.
A $25,000 bond, renewed each license year, conditioned on the dealer (1) complying with the conditions of any written contract it makes in connection with the sale or exchange of a motor vehicle, and (2) not violating chapter 319 (title and lien law) or chapter 320 (dealer licensing) in the conduct of the licensed business. Any person in a retail or wholesale transaction who suffers loss from a violation may recover on the bond. The surety's aggregate liability in any one year is capped at the bond amount.
What Does the Dealer Bond Cover?
The two conditions are broader than they look. Chapter 319 contains the title-transfer deadlines, the trade-in lien rule, the odometer statute, and the branded-title disclosure duty. Chapter 320 contains dealer licensing and its own list of prohibited conduct. Common covered claims:
- Failure to deliver title. Section 319.23, Florida Statutes, requires the dealer to apply for transfer of title within 30 days of delivery. A dealer that takes your money and never files is the most common bond claim of all.
- Failure to pay off a trade-in. Section 319.24(5) gives the dealer ten working days. A late or missing payoff can be a chapter 319 violation on its face. See our page on dealers that don't pay off trade-ins.
- Odometer and title fraud. Rolling back mileage or concealing a salvage, rebuilt, or flood brand violates chapter 319's odometer and disclosure sections.
- Breach of the written contract. Promised repairs in a "we owe," a warranty the dealer sold and won't honor, a refund it agreed to in writing, a deposit it promised to return.
- Misrepresentation in the sale. Where the misrepresentation breaches a written term or a chapter 319 or 320 duty, the resulting loss can be within the bond.
What the bond generally does not cover: your attorney's fees, punitive damages, or losses from conduct outside the dealer's licensed business. Fee-shifting comes from FDUTPA and the other statutes in your lawsuit against the dealer, not from the surety.
Who May Claim Against a Florida Dealer Bond?
Any person in a retail or wholesale transaction with the dealer who suffered a loss from a violation of the bond's conditions: retail buyers, people who traded a vehicle to the dealer, and in wholesale deals, other dealers and auctions. You don't need a FLHSMV finding first, and you don't need a lawyer to make a demand.
How a Florida Motor Vehicle Dealer Surety Bond Claim Is Made
- Identifying the surety FLHSMV's Bureau of Dealer Services keeps the bond on file for every licensed dealer. The dealer's bond information is available by public records request, or through a dealer complaint. A claim needs the surety's name, the bond number, and the license period.
- The written claim to the surety A demand letter that identifies the dealer, the bond number, the transaction, the specific condition violated (the section of chapter 319 or 320, or the contract term), and the dollar amount of the loss, with documents attached.
- The surety's response: proof, or a judgment Some sureties pay a well-documented claim on demand. Many take the position that they'll pay only on a judgment against the dealer or an agreed settlement. That's why a bond claim usually runs alongside, not instead of, a lawsuit against the dealer. Our guide to suing a car dealer in Florida covers the section 501.98 demand that starts that case.
- The FLHSMV complaint in parallel The department can investigate, cite the dealer, and put its license at risk, which is sometimes the pressure that produces a settlement. The process is in our post on how to file a complaint against a Florida dealer.
We routinely obtain the bond disclosure from FLHSMV as part of initial due diligence and put the surety on notice at the same time we send the dealer the statutory demand. Getting on the surety's claim ledger early is the point, for the reason explained next.
When Claims Exceed $25,000: Bond Interpleader
A dealer that cheated you probably cheated others. When the surety receives claims that together exceed the bond, it doesn't pick winners. It files an interpleader action in circuit court, deposits the $25,000 into the court registry, names every known claimant as a defendant, and asks the court to decide who gets what. The surety is then discharged, and the claimants litigate against each other over a fixed fund.
That's a real lawsuit with real deadlines. Claimants who don't answer are defaulted and get nothing. Claimants whose losses aren't proven get reduced or cut. The court typically distributes the fund among the claimants who establish their losses, often pro rata, though the mechanics vary. We litigate dealer bond interpleaders, and the consumers in the strongest position are the ones who documented the claim early and answered on time.
If you receive a summons naming you as a defendant in a surety's interpleader action, you're not being sued for money. You're being told there's a fund and a court-set window to claim your share. A claimant who misses that window is defaulted out of the fund; a claimant who answers and proves the loss shares in it, and the separate claim against a still-solvent dealer for the balance and attorney's fees continues on its own track.
Limits of the Bond: $25,000 Is a Floor, Not Full Recovery
Three limits matter. First, $25,000 is the surety's total exposure for the license year, however many consumers were harmed. One buyer of a $40,000 car with a washed title can exhaust the bond alone. Second, the bond doesn't pay attorney's fees unless you also recover them from the dealer. Third, the bond isn't a substitute for the dealer's own liability, which is unlimited. The bond is the one pot of money that's certain to exist; a judgment against a closed dealership may be worth nothing, and a timely bond claim can be worth up to $25,000 of it.
Dealer Went Out of Business? Title and Bond Options
The worst version of every dealer case is the one where the dealership has closed, the phone is disconnected, and you don't have a title. Two tracks matter, and both are time-sensitive.
The title. Where a buyer paid for the car and the dealer never applied for title, the FLHSMV dealer complaint, supported by the bill of sale, buyer's order, proof of payment, and any temporary tag, is the route the department provides. It can pursue the dealer's license and, depending on the records it holds, assist with getting title issued. A lender that financed the purchase has its own interest in the title.
The bond. A closed dealer's bond remains liable for violations during the license period it covered. The surety information comes from FLHSMV, the claim goes to the surety, and an interpleader is likely, because a dealer that closed owing you a title almost certainly owes others. Timing matters here: under section 320.27, the surety's exposure is capped per year, and the year the dealer closed is the year every other victim is claiming against.
What Supports a Bond Claim
- Buyer's order, bill of sale, and retail installment contract.
- Proof of every payment to the dealer: down payment receipts, bank records, lender funding confirmation.
- Temporary tag, registration, and any title paperwork you were given.
- Trade-in documents and the old lender's payoff statement, if a trade was involved.
- The "we owe," warranty, or any written promise the dealer didn't keep.
- Every text, email, and letter with the dealer, and a timeline of calls.
- Evidence of the loss: repair estimates, a title history showing the brand, the payoff you covered yourself.
A free case evaluation with those documents is how we review the matter. If we can assist, we identify the bond, put the surety on notice, and evaluate the claim against the dealer that runs alongside it.
As Seen On
Attorney Joshua Feygin spoke with Local 10 News (WPLG) about whether Florida's $25,000 dealer surety bond, unchanged since it was set decades ago, still covers buyers at today's vehicle prices. The segment is on the station's own site; we don't host their video here.
Florida Dealer Bond Claim FAQ
How much is a Florida car dealer's surety bond?
Do I have to file a FLHSMV complaint before claiming on the bond?
Will the surety just pay me if I send the documents?
The dealer closed and I never got a title. Is the bond my only option?
Dealer closed, stalled, or won't pay?
Submit a free case evaluationIf an attorney can assist, you'll receive an intake questionnaire and retainer agreement.
This page is attorney advertising and general information, not legal advice. Reading it does not create an attorney-client relationship. Results depend on the facts and law of each matter; prospective clients may not obtain similar results. Statutory damages described are as set by law and are before deductions for attorney's fees and costs. Sue Your Dealer – A Law Firm, Hollywood, Florida · By appointment only · (954) 321-0507.