How Dealerships Can Move This Part of Their Car Sales Online

car sales online

What used to only happen in person is now occurring online at a fast pace. Over the past few years, car dealerships have experienced an increase in online transactions, with 30% of U.S. new car sales taking place digitally in 2020.

This shift towards online purchases correlates with consumers’ recent shopping habits. Studies suggest that 59% of car buyers spend time researching vehicles online, likely a reason automotive executives expect online car sales to reign in the near future.

According to a poll conducted by Automotive News, 46% of automotive executives predict a significant increase in direct-to-consumer sales by automakers, pushing typical franchised dealerships to the side. The poll also suggests that 78% of executives think most new car sales will occur online by 2030. 

If you’re like other dealers, you’re either prepared or preparing for this major shift towards online car shopping, especially if you want to maintain a successful business. Maybe you’re creating digital ads instead of traditional ones, sprucing up your website instead of buying a new lot, and hiring a social media manager instead of another salesperson. All these steps are great and necessary if you want to compete with other car dealers online, but there’s another step in your sales process that should be digital: your DMV strategy. 

Handle Your DMV Needs Digitally 

learn how to do your car sales online.

Once you complete a car sales transaction, what happens next? You have to do the paperwork for the DMV to ensure your buyers get their tags, license plates, registration, and more. Finding the applications for these materials and filling everything out is always a hassle, and failing to do so quickly can slow down your ability to finalize transactions. 

That’s why you need to consider moving your DMV process online. Instead of compiling all of the necessary paperwork, filling it out by hand, and submitting it in person, you should make this step entirely digital. Doing so will provide multiple benefits, including the following. 

1. Improves the customer experience 

There are many reasons consumers are shopping for vehicles online. One of the biggest is that it offers a better experience. Shopping for cars online means people don’t have to plan a trip to the dealership, experience long wait times, deal with pushy salespeople, or get flustered by large crowds. Searching for cars digitally also provides a quick and easy way to look at different options, find the best prices, and customize vehicles. 

But this excellent customer experience can come toppling down if buyers have to wait a while for their tags, license plates, and registration because you’re doing things the traditional way. Handling DMV needs online ensures buyers get what they need quickly to continue having a great customer experience. 

2. Provides convenience

Another benefit of doing DMV paperwork online is that it’s convenient for you. Taking the digital route means you no longer have to suffer through long lines at the DMV, experience constant back-and-forth with representatives, or try to stay organized as you manage tons of documents. An online DMV process is smooth and hassle-free if you approach it correctly. 

3. Boosts productivity   

Do you want to increase your productivity to have more time to close deals? If so, handling DMV paperwork online can help. You can significantly cut the time it takes to gather material for the DMV by doing everything digitally. What used to take weeks could now take days. And having more time on your calendar will allow you to focus on other important tasks like finding creative ways to increase sales online. 

How to handle DMV paperwork online

If addressing your DMV needs digitally is the next step you must take as car sales shift online, it’s not hard to make this happen. In fact, all you need to do is work with a private DMV services company like Barry Risk Management. 

We handle dealers’ DMV paperwork, so they don’t have to worry about this task. And we do everything digitally. From gathering the paperwork to filling it out, everything we do happens online to ensure dealerships give their customers what they need in a timely manner and maintain a high level of productivity. 

Tons of dealerships across the nation have outsourced their DMV tasks to our team. We have over 30 years of experience in the industry and understand the DMV rules in every state. Because of that, we have the knowledge to ensure any and every dealer provides the proper material to their customers. 

So if you want to join the league of dealers who trust us with their DMV needs, reach out to our team. One of our representatives will walk you through our online process and answer any questions you may have. Afterward, we’ll start taking care of your DMV paperwork digitally so that every step of your car sales process is online, leading to a better experience for you and your customers. 

Contact us at 1-888-995-TAGS(8247) to start shifting your DMV strategy online!

How Auto Dealers Can Quickly Handle DMV Paperwork

DMV paperwork

If you’re an auto dealer, business is about to get busy. The intent to buy new or used cars is increasing amongst consumers. Research suggests that 94% of people are looking to buy a new car, and 97% of consumers have intentions to buy a used car.

These numbers have significantly increased since 2020, which means you can expect to ramp up sales and bring in more deals. But while you’re speaking with eager consumers and showing the vehicles on your lot, keep in mind that making an official sale won’t be a walk in the park, and that’s not because customers will be demanding. It’s because the DMV will be more challenging to work with than usual. 

The DMV wait times are increasing 

You may have heard that businesses spanning various industries are currently facing staff shortages. According to the Job Opening and Labor Turnover Survey by the Department of Labor, there were 11.3 million job openings in January 2021. 

Of course, when an organization is short-staffed, you’ll experience longer wait times than usual, and unfortunately, this is especially true with the DMV. There’s no reason to sugarcoat it—the DMV is notoriously slow, and when you throw in labor shortages, getting things done will move at a snail’s pace, and that’s not an exaggeration. 

DMVs across the U.S. have fewer employees than usual, leading to longer wait times. In fact, a DMV in Oregon recently reported that it’s trying to keep things going with only six employees on most workdays when it usually has 17 employees on hand. 

With these severe staff shortages, you’ll have a tough time completing the forms you must give the DMV after you sell a new or used motor vehicle. Most likely, you won’t even know which documents to fill out and submit to make a transaction official. 

The DMV requires a plethora of paperwork, and keeping up with it can be challenging, which is why it’s tempting to call the DMV or go in person to figure everything out. But because DMVs are so short-staffed, it’ll be incredibly difficult to get someone on the phone. And speaking with an associate in person could take hours or an entire workday. 

How to skip the long DMV process

the best ways for auto dealers to handle DMV paperwork

While the DMV may not be able to assist you in providing necessary paperwork, you can’t let that stop you from making sales. Otherwise, you won’t have a dealership. However, how can you figure out which documents to give the DMV so that your customers can drive their vehicles legally? 

The best step is to use a private DMV services company, which will act as an intermediary between you and the actual DMV. A good, reputable company will know the exact documents to submit to the DMV and will even deliver the forms for you. With this type of business working by your side, you’ll not only complete the necessary forms to make your transactions official, but you’ll also have the opportunity to give your customers essential items, including the ones below. 

1. Titles

Without a title, who’s going to believe someone owns their car? You need to get this document to your customers as soon as possible, and a private DMV services company will make that happen. It’ll handle and submit the required information to the DMV, ensuring you get titles to your customers in a timely manner.  

2. License Plates 

After you make a sale, you need to give your customers a temporary license plate. However, keep in mind that you may need to provide the official license plate as well. Some customers will prefer you to do it instead of handing it themselves, but accommodating this request can be quick and painless with a private DMV services company. 

This type of business will gather all of the necessary forms and give them to the DMV. Then, your customers will have an official license plate in their mailbox in no time. 

3. Tags and registration 

Other items your customers may want you to provide are their tags and vehicle registration. And no, this doesn’t include the temporary tags and registration you give them before they drive off the lot. 

Most likely, you’ll also need to provide the official documents, which a private DMV services company can handle for you. Instead of filling out the paperwork yourself, a private DMV services company will get everything together, submit it, and make sure your customers receive their tags and registration quickly. 

The best DMV services company to use

Using a private DMV services company may sound like a good idea. But this good idea can fail fast if you don’t use a great DMV services company. An inexperienced one won’t know which documents to submit to the DMV after you make a sale, leading to chaos, confusion, and unhappy customers. 

However, our team at Barry Risk Management isn’t inexperienced or unknowledgeable. We’ve been working in the DMV industry for over 30 years, so we know exactly what you need to provide to legitimize your transactions and help customers get what they need. 

Even better, we handle everything online, so you don’t have to take a break out of our busy schedule to visit us. You can focus on making deals and give us a call in between to let us know what you need. We’re available and ready to provide the DMV services you require, so reach out to speak with one of our representatives so that you’re equipped to handle your increase in sales. 

Use a team of experts to handle your DMV needs by calling Barry Risk Management at 1-888-995-TAGS(8247). 

How to Get an Auto Dealer License

how to get an auto dealer license

If you love cars, you may have considered owning an auto dealership. After all, this route would give you an opportunity to talk about cars all day long, geek out about their features, and help people find the vehicle of their dreams. But starting and owning a dealership doesn’t solely hinge on your love for cars. 

In between your idea of creating a business and opening your door lies a lot of paperwork that you have to mow through, and most of that paperwork centers around one thing: getting your auto dealer license. This step is crucial, especially if you want to own a legally operating business in whatever state your dealership is located. 

However, while necessary, most people don’t know how to complete this step, so it’s easy to wonder how to get an auto dealer license. And even though it’d be nice to say this document is easy to acquire, getting a license is actually harder than you might expect. 

Do you need an auto dealership license? 

Before explaining how to get an auto dealer license, first things first. Do you even need one? As mentioned earlier, obtaining this license is necessary if you want your dealership to be a legally operating business. But there are some exceptions to this rule. 

If you don’t want a dealership license but would like to sell a car, the title for that vehicle must be in your name, and you must use that vehicle for personal, family, household, or business purposes. For example, maybe you want to buy a new car, but you need to sell your current one first. In this case, you can do so only if the car title is in your name. 

Every state gives you the power to sell your personal vehicle. But if your name isn’t on a title, you can’t sell the car, or you’ll commit an illegal act called title-jumping, which is a crime in every U.S. state. 

Of course, you may be wondering if you can simply title a car in your name before you sell it, but this loophole doesn’t exist. While you wouldn’t be title-jumping anymore, you’d still have to prove that you used the vehicle for business, family, or household reasons. 

So, if you plan on selling multiple cars—and not a personal vehicle that you own and actively use—you need to get an auto dealer license. Otherwise, you can get in trouble and suffer some consequences. 

Which auto dealer license do you need? 

Once you know whether an auto dealer license is necessary, it’s time to pick out the type of license you should pursue. Ultimately, the path you choose will depend on the kind of dealership you plan to run. 

One of the best things about being an auto dealer is that you can decide which type of vehicles to sell. For example, here are three common options. 

1. An auto dealership with new vehicles

If you plan to operate a dealership with new vehicles on the lot, you’ll likely need to be franchised directly through a manufacturer to operate legally in your state. Once you get that sorted out, you’ll need to pursue a new dealer license. 

2. An auto dealership with used vehicles

Perhaps you only want to sell used vehicles. If that’s the case, you may not need to be franchised directly through an auto manufacturer. But you’ll still need to acquire a used vehicle dealer license. 

3. An auto dealership with new and used vehicles

Owning a dealership with both new and used cars is possible. However, you’ll probably need to get an auto dealer license for each type of car sale you hope to pursue. 

Also, it’s important to keep in mind that a dealership that sells new vehicles can quickly start selling used cars. But for used car dealerships, you can only sell used vehicles, so keep that in mind when you’re deciding which type of dealership to own. 

4. An auto dealership without a lot 

In this digital age, you may consider having a dealership without a lot. This strategy would reduce a lot of startup costs, so it’s understandable if you want to take this route. 

Some states will let you operate your business online, but that doesn’t mean you can avoid licensing. You still need to acquire the right dealer license and follow your state’s laws even though your business is digital. 

Meet the state requirements for licensing

One part of learning how to get an auto dealer license is knowing your state's requirement

Nailing down the type of auto dealer license you want will allow you to take the next step towards legitimizing your business: reviewing your state’s requirements for licensing. Most states will have some of the same guidelines. 

For example, you’ll most likely need to secure a properly zoned location (if you’re getting a lot) and have your location and business approved. Additionally, a few other standard requirements may arise, including the following: 

  • Meeting your zoning requirements 
  • Providing proof of insurance 
  • Registering your business
  • Passing a background check
  • Attending a pre-licensing seminar
  • Arranging a business inspection 

Of course, these requirements are not set in stone. Your state may have some of these guidelines, or they may have a completely different set of criteria. For the best chance of success, research your state’s specific requirements for an auto dealer license. 

Don’t forget to acquire an auto dealer bond

No matter your business location, you’ll likely need to get an auto dealer bond before you apply for a license. A surety bond will protect your customers and allow them to make a claim against you if they believe you’re running an unethical, fraudulent, or unlawful business. 

The cost of the auto dealer bond will only be a small percentage of the total bond amount. However, the bond cost will vary depending on different financial factors like your personal credit. 

Once you’re ready to get an auto dealer bond, it’s best to go through a transportation agency like Barry Risk Management. Acquiring a bond can get tricky if you’re doing it on your own, but it can also be relatively easy if you have help. 

Submit a licensing application

The final step for getting an auto dealer bond is simple: submit your licensing application. This step will be straightforward if you’ve completed everything else, but there will be a lot of paperwork involved. 

For example, when submitting a dealer license application in New York, you have to complete several steps for the Department of Motor Vehicles that require you to either fill out or obtain information. Failure to have all the correct documents will prevent you from applying to get an auto dealer license. 

If you don’t want to face any potential roadblocks, the best solution is to find a transportation agency to handle everything. Companies like Barry Risk Management, which has over 30 years of experience in the DMV industry, can help New York dealerships get their licensing. 

Even better, Barry Risk Management does everything online, so you don’t have to come inside an office and wait for a representative to speak with you. All you need to do is make a phone call, and you’ll get the assistance you need. 

To get your car dealer license in New York, call 1-888-995-TAGS(8247) to speak with a representative at Barry Risk Management. 

Why Vehicle Pickup and Delivery Offers Customers Convenience

vehicle pickup and delivery

If there’s one thing that your customers want, it’s convenience. In today’s world, many consumers seek convenience, even preferring it over equally important factors like price.  

Just look at Amazon Prime. For a little over $10 per month, you can have purchased products on your doorstep within 24 hours. Also, consider food delivery apps. Postmates, Uber Eats, DoorDash, and Grubhub have become staples in society. Even on a nice day, when you can easily hop in your car and pick up your food, it’s tempting to use a delivery service instead of leaving the comfort of your home. 

With convenience reigning in most people’s lives, your customers expect ease and simplicity from every brand they purchase from, including your dealership. It doesn’t matter if you’re not running a billion-dollar e-commerce brand or a food delivery service app. Convenience is not bound to a specific industry—it’s a desire that your customers have for every single brand they come into contact with.  

That’s why your dealership must take steps to offer the same convenience that other companies are providing. If it doesn’t, your brand won’t succeed long-term, and that’s not an exaggeration. 

Luckily, offering this convenience isn’t a hard thing to do. In fact, something as simple as vehicle pickup and delivery can significantly increase your customers’ happiness and satisfaction. 

Why vehicle pickup and delivery is crucial 

The pandemic made one thing very clear for dealerships: you can’t rely on foot traffic. When consumers were confined to their homes, every business struggled, including dealerships that didn’t offer a touchless experience. 

If their customers couldn’t come to the lot, they couldn’t buy a car. Similarly, if they couldn’t drive to the service center, they couldn’t get an oil change or the tune-up they needed. 

This reality forced auto companies to reconcile with the fact that they had to make life easier for their customers. However, don’t get the wrong idea—dealerships have always needed a way to offer more convenience, but the pandemic made that fact crystal clear. 

Even now, as life starts to normalize, people are still wary of coming into dealerships. Crowds and too much face-to-face interaction are not things that everyone is currently comfortable with, especially if they can avoid it. And if you’re assuming your dealership can hold out until life is completely back to normal and foot traffic is on the rise, you may find yourself disappointed. 

Many auto brands—both large and small—are starting to replace face-to-face transactions with touchless experiences like vehicle pickup and delivery services. Brands that were doing it pre-pandemic are now making it the central focus of their business.  

If you’re not doing the same, consumers who had your dealership top-of-mind will remember the auto company down the street and call that one instead. Convenience is king, so regardless of whether there’s a pandemic, your customers will buy from the dealership that’s making their lives easier. 

The benefits of vehicle pickup and delivery 

why vehicle pickup and delivery benefits customers

When it comes to vehicle pickup and delivery services, there are a couple of ways that your auto dealership can provide them. 

One option is to deliver the vehicle that your customer has purchased. If you have online sales capabilities, where customers don’t have to come onto the lot to purchase a car, you can complete this process by delivering their vehicle to them. 

The second option is also simple: pick up the vehicle that needs servicing and deliver it to your customer once it’s ready. This offer will allow consumers to skip the hassle of waiting in line to check in their car and get a loaner vehicle. With your help, customers can simply sit at home while you take care of the details. 

Of course, you can implement both of these options. Doing so would give your customers all of the convenience they seek, which would come with many benefits. 

For example, Brain Benstock, who works at Paragon Honda-Acura in New York City, told Automotive News that his department’s valet program—a vehicle pickup and delivery service—expanded to more than 3,000 trips per month in a little over two years. Major automakers like Audi, Infinity, General Motors, and Fiat Chrysler Automobiles also have local dealers implementing pickup and delivery services because they know how beneficial it is for their customers and success. 

By offering this type of convenience, growth spurts in sales and customer retention are inevitable. Customers who have used vehicle and pickup services even claim that the offering is a “great experience” and “amazing and unique” and that it saved them “time and effort.” 

How to offer convenience to customers

While providing a pickup and delivery service is an excellent idea, it can go terribly wrong if you don’t do it correctly. What’s also important to know is that it can come with costs if you’re not careful. 

Management software, increased labor spending, complexities in your customer’s schedules, and the risk of getting into an accident while driving your customers’ vehicles are all factors you have to consider. Consequently, you may not have the easiest time implementing this strategy. 

After all, even though 67 percent of auto dealers created some sort of vehicle pickup and delivery department in April 2020, only 59 percent of dealers still offer it. The difficulties are sometimes too much to handle, which is why you need to find experts who can help you roll out and maintain this program.

Barry Risk Management has a team of experienced professionals who can help your dealership implement and manage its vehicle pickup and delivery services. With over 30 years of experience in the industry, the representatives at Barry Risk Management know how to handle unforeseen delays, mishaps, schedules, and consumer needs to increase dealer efficiency, enhance customer service, and grow customer satisfaction. 

You don’t have to do this all on your own. Since this type of offering is new territory for so many dealerships, lean on companies like Barry Risk Management for help. The representative you work with will ensure your customers enjoy the convenience they’re seeking so that your sales and retention rates soar. 

For help implementing a vehicle pickup and delivery service, call 1-888-995-TAGS(8247) to speak with a representative at Barry Risk Management. 

What is Dealership Insurance?

what is dealership insurance

Starting any type of business is challenging, but it’s especially difficult when your business requires you to look after employees and a large inventory. For example, perhaps you own a dealership. In this scenario, you have to consider multiple factors to set your company up for success, and one of those factors is dealership insurance.  

This piece of the puzzle is a crucial part of your business plan. Running a successful dealership doesn’t solely hinge on the sleek motor vehicles on your lot and the great salespeople on your team. If you want your dealership to thrive, you need insurance. 

But what exactly is this type of insurance, and how much does it cost? While it’s not easy to find these answers online, that doesn’t mean the answers aren’t important. In fact, you should know everything there is to know about dealership insurance before you try to get it. That way, you understand what you’re looking for and know what to expect as you search for it. 

Do you need dealership insurance? 

It’s a common misconception that buying insurance for your business is an added cost that comes with little to no benefits, but that thinking couldn’t be further from the truth. There are long-term advantages of having insurance for your dealership. With so many things out of your control, your company is always at risk and easily exposed to various financial obligations and liability costs. 

For example, what if someone breaks into your showroom and steals the most precious car in your collection? Or, what if your inventory burns because a fire happens in your stockroom? Even worse, what if you’re showing a customer around your dealership, and they slip and fall? 

All of these scenarios are ones that you can’t prevent. They can happen at any time and any point of the day, and all you can do is react appropriately. If you want to have a good reaction, you need dealership insurance. With it, you won’t get overwhelmed and discouraged because of bad events.

Which dealerships need insurance? 

Outside of the benefits of auto dealer insurance, you may be wondering if your specific dealership needs coverage. After all, there are many types of dealerships, so is insurance only applicable to a certain few? 

Honestly speaking, the answer is no. Auto dealer insurance applies to any garage-related business. For example, you can get dealership insurance if you have one of the following companies:

  • New and used car dealership
  • Motorcycle dealership
  • Motor vehicle dealership
  • Recreational vehicle dealership
  • Powersports dealership
  • Boat and heavy equipment dealership
  • Trailer dealership
  • Auto transmission repair and glass installation
  • General auto repair and service
  • Truck repair and body installation
  • Auto body shop and restoration
  • Auto detailing shops

Any of these businesses can benefit from having dealership insurance, so if you have one of these companies, don’t hesitate to get a policy. 

Types of dealership insurance 

types of dealership insurance

When you decide to get auto dealer insurance, you should seek coverage that’s personalized to your dealership. Luckily, there are many types of dealership insurance that you can choose from, and the one you move forward with should factor in the number of employees you have, the state your business is in, your dealership’s size, and your financial capability.  

1. General Liability 

This type of coverage is the foundation of all liability insurance. It offers diverse protection for auto dealers because it provides coverage for property damage, libel, copyright infringement, bodily injury, slander, misleading advertisements, and more. Additionally, general liability pays for medical expenses that rack up from business operations as well as settlement expenditures and legal costs. 

2. Workers Compensation

It should go without saying that workers’ compensation is necessary for any business. Most states in the U.S. require companies to have this type of policy because it protects you—as the employer—and your employees. 

With workers’ compensation, you’ll get coverage for lost wages and medical expenses that occur because of work-related illnesses or injuries. Additionally, you’ll receive protection if lawsuits regarding negligence ever come up. 

3. Employment Practices Liability Insurance (EPLI)

This insurance is crucial if you have employees, even if your dealership is small. Employment Practices Liability Insurance (EPLI) provides protection for employment-related incidents like wrongful termination, breach of contract, harassment, discrimination, and other work-related issues. 

4. Garage Keepers Liability 

While this policy is optional, it’s still just as important. Garage Keepers Liability helps you if your customer’s vehicle is damaged. It offers protection for theft, extreme weather, vandalism, fire damage, and collision damages that occur at your dealership. It also pays for claims while your customer’s car is in your custody, control, care, or possession. 

5. Garage Liability Insurance

This insurance is quite different than the one above, even though it’s easy to use them interchangeably. Unlike the policy mentioned above, Garage Liability Insurance provides coverage for property damage and bodily injury that happens because of an accident at your dealership. If you want to protect your business when accidents happen, then you need to get this coverage. 

6. Business income 

No business is immune to natural disasters. It doesn’t matter where your business is located—it can get caught in a bad storm. And if you want your dealership to continue operating after the natural disaster ends, you need business income insurance, which covers any lost income. 

For example, maybe you need help covering business expenses that add up during the restoration period or need assistance with payroll expenses. In these cases, business income insurance is great.

7. Errors and Omissions Insurance

At an auto dealership, you’re supposed to help customers look for new and used vehicles, which means you work in the service industry. Because you give professional advice to customers on a regular basis, errors and omissions insurance is critical. 

This type of coverage kicks in when your team doesn’t complete its work correctly. For example, if someone misses a critical step while providing a service or omits information that could harm customers, you want errors and omission insurance to protect you. 

How much does auto dealer insurance cost? 

Like most types of insurance, the cost of dealership insurance depends on a variety of factors. Consequently, it’s not easy to give you a specific rate in a blog post, but it is easy to tell you what insurance companies consider when determining your fee. 

For example, a few factors come into play, including the following: 

  • The size of your dealership (i.e., the number of vehicles for sales, the square footage, and total business value) 
  • What state your dealership is in 
  • The number of employees at your dealership 
  • The number of insurance policies you choose
  • The types of insurance policies that you purchase

If you want a specific quote for your auto dealer insurance, it’s essential to speak with an insurance company. But please keep in mind that it’s critical to contact the right business. 

Most companies will give you insurance quotes that change at any given moment. Typically, none of the quotes are reliable until you commit, and that’s why it’s important to speak with the right insurance company. 

Barry Risk Management is an excellent option if you want a rock-solid insurance quote that won’t change in the blink of an eye. Backed by a team with more than 30 years of experience, Barry Risk Management can find the right insurance policies for your dealership and give you a reasonable price that you can count on. 

Just call 1-888-995-TAGS(8247) to speak with a representative at Barry Risk Management. They’ll give you a fast and reliable quote for your dealership insurance. 

How to Get an Auto Dealer Bond In New York

how to get an auto dealer bond in NYC

If you’re an auto dealer in New York, there are a few things that you know you need. You need a car dealer license, motor vehicles to sell, a decent-sized lot, and a handful of salespeople if you’re just starting out. 

These are obvious necessities for your business. However, there’s something else that’s just as important to have and that states even require: an auto dealer bond. 

In states like New York, you must have an auto dealer bond if you want to operate as a car dealer. But, more often than not, most people know nothing about auto dealer bonds. 

They don’t know what they are, what they cover, how much they cost, or even how to get one. And that’s why this article will clear the smoke, pull back the curtain, and demystify one of the most essential things that every auto dealer in New York needs. 

What is an auto dealer bond?

how to get an auto dealer bond to protect customers

Some people call an auto dealer bond a car bond—and honestly, both terms are correct. They each mean the same thing. Regardless of the phrase you use, this type of bond is a legally binding contract that protects customers, including everyday consumers and state or local agencies.  

This protection allows customers to take recourse when they’re exposed to fraud or misrepresentation during a business transaction. For example, maybe you decide to sell a car that has invalid tags. Whether you knowingly or unknowingly do this, your customer has the right to file a claim on your bond. 

When your customer takes this step, the business that’s backing your bond will pay the costs for your mistake. But the company will only pay up to the amount of the required bond. Then, you’ll have to reimburse the business. You don’t get to walk away scotch free. 

This series of events will occur anytime you don’t follow the applicable regulations and laws that your state has for auto dealers. And the only time you can get away with avoiding a customer’s claim is if the claim on your bond is illegitimate, meaning it’s false.  

Another thing you should keep in mind is that there are different types of auto dealer bonds. The one you choose will depend on your state’s requirements and the types of vehicles you’d like to sell. Some of the most popular bonds include: 

  • Used auto dealer bonds
  • New auto dealer bonds
  • Mobile home dealer bonds
  • Motor vehicle bond
  • Wholesale dealer bond

Each of these bonds is tailored to the type of dealership that you’ll run, so make sure you get the right one for your business. 

What does an auto dealer bond cover? 

While it’s important to know what an auto dealer bond is, you also need to know the ins-and-outs of what it covers. As previously mentioned, an auto dealer bond will protect customers who are exposed to fraud or misrepresentation during a business transaction. But what that fraud or misrepresentation looks like can vary. 

Sometimes, it can look like a deliberate mistake you’ve made, or it can look like a simple error and misunderstanding. For better context, here’s a list of scenarios in which a customer can make a claim on your bond: 

  • Selling stolen motor vehicles
  • Forgetting or avoiding to pay sales tax and fees to the state
  • Not reporting a sale
  • Committing financial fraud
  • Fraudulently representing a motor vehicle during a transaction
  • Withholding vehicle titles
  • Failing to meet warranty obligations
  • Refusing to pay for a trade-in vehicle
  • Forgetting or avoiding to pay lenders
  • Giving a check that’s returned for insufficient funds

Clearly, the list of protections that customers get from an auto dealer bond is vast. And while it might seem like you have to walk a tightrope when you have an auto dealer bond, you don’t have to do that. You just have to follow the law and handle your business responsibly. 

How much does an auto dealer bond cost? 

the costs of an auto dealer bond

As with most things, the price of an auto dealer bond will vary. What you pay in New York will depend on the state’s requirements, especially since the state handles licensing. However, three other primary factors can also influence the cost of your auto dealer bond. 

1. The amount of the bond

If the amount of your bond is significant, your costs will be higher than bonds that cover a lower amount. 

For example, if you have a $200,000 auto dealer bond, then the costs you have to pay will be higher than if you had a $10,000 bond. 

2. Your credit history 

Like it or not, your credit score plays a critical role in determining how much you pay for your auto dealer bond. 

If you have a credit score that’s 700 or higher, you’ll likely pay 1-4% of the total bond amount. If your credit score is 650 or lower, you’ll likely pay 5-20% of the total bond amount. 

3. Your history of losses  

Unfortunately, there are some bonds that have a significant number of losses. And the company backing your bond will take this factor into consideration when determining the cost of your auto dealer bond. 

Bonds with minimal historic losses will come with lower costs than ones with higher historic losses, which will come with a premium price tag. 

How do you get an auto dealer bond? 

Regardless of the costs for your auto dealer bond, you need to get one. It protects your customers, provides necessary coverage, and it’s required. But how do you get an auto dealer bond in New York? 

Luckily, the answer is simple. Use Barry Risk Management, Inc. 

While typically known for their DMV expertise, Barry Risk Management, Inc. has a parent company named Barry Risk Management. This business specializes in helping people discover and buy the best coverage for their everyday needs, including auto dealer bonds. 

With the guidance of Barry Risk Management, you can trust Barry Risk Management, Inc. to get the auto dealer bond that you need in New York. The only thing you have to do is reach out to a representative, and that agent will have the insight and knowledge to ensure they meet your business needs. 

To get your auto dealer bond, contact an agent at Barry Risk Management, Inc. today!