Iowa Motor Vehicle Dealer Bond

The $75,000 bond protects consumers and the State of Iowa from financial losses caused by dealer violations of Iowa motor vehicle laws. This includes issues like title fraud, odometer tampering, misleading advertising, failure to provide proper titles, and other violations of Iowa Code Chapters 321 and 322. If a dealer violates these laws, consumers can file claims against the bond to recover their losses.

Any person or business selling more than 3 motor vehicles per year in Iowa must obtain this bond. This includes new and used car dealers, independent dealers, and towable recreational vehicle dealers. The bond is required by the Iowa Department of Transportation as part of the dealer licensing process under Iowa Code § 322.4.

To obtain an Iowa Motor Vehicle Dealer license, you must: 1) Secure the $75,000 surety bond from an Iowa-licensed surety company, 2) Complete the dealer license application and pay required fees, 3) Provide proof of financial liability coverage with minimum $100,000 limits, 4) Establish a business site with proper facilities and request an onsite inspection from the Iowa Bureau of Investigation, 5) Complete an 8-hour pre-licensing course (for used vehicle dealers), and 6) Submit manufacturer's certification if operating a franchise. The bond must be filed with the Iowa DOT Motor Vehicle Division before your license can be issued.