Florida Franchise Motor Vehicle Dealer Bond (VF) — $25,000

The Florida VF bond is a $25,000 surety bond required by the Florida Department of Highway Safety and Motor Vehicles (FLHSMV) under Fla. Stat. §320.27(1)(c)1 for any dealer licensed to sell new motor vehicles under a signed manufacturer or distributor franchise agreement. It is filed on Form HSMV 86020, the same bond form used for VI, VW, VA, and SD classes. The bond is conditioned on the dealer’s compliance with §320.27 and §320.131 and indemnifies retail buyers, lenders, and the state against loss caused by the dealer’s violation of those provisions.

No. Both the VF franchise (new) class and the VI independent (used) class post a $25,000 bond on Form HSMV 86020. Fla. Stat. §320.27(1)(c) sets a single $25,000 amount for all five motor vehicle classes (VF, VI, VW, VA, SD). The distinction between VF and VI lies in inventory authority (new vs used), the requirement of a manufacturer franchise agreement, the December 31 versus April 30 renewal date, and exposure to the franchise relationships statutes (§§320.60–320.70). The dollar amount and bond form are identical.

The dual calendar is statutory under Fla. Stat. §320.27. Franchise (VF) licenses follow a calendar-year cycle and expire December 31 each year; independent (VI), wholesale (VW), auction (VA), and salvage (SD) classes operate on a May–April fiscal-style cycle and expire April 30. Mobile home and recreational vehicle dealers operate on a separate October 1 cycle under §§320.77 and 320.771. Renewals for any class must be filed at least 30 days before expiration; the 45-day late window and $100 late fee apply across the §320.27 classes.

Section 320.642 governs new-line additions and relocations under the Florida franchise relationships statutes. When a manufacturer or distributor files notice of intent to appoint a new same-line dealer or to relocate an existing one into a market area, existing same-line franchisees within the relevant geographic area can file a protest with the department within the statutory window (60 days under current law). On protest, the manufacturer carries the burden of demonstrating that the additional appointment or relocation is warranted. §320.642 sits alongside §320.641 (franchise termination protections) and §320.643 (transfer-of-dealership protections) as the core franchise dealer safeguards.

Yes. Fla. Stat. §320.27(3) requires VF franchise dealers to maintain garage liability insurance with at least $25,000 combined single-limit bodily injury and property damage coverage, plus $10,000 personal injury protection (PIP). The certificate of insurance is filed with Form HSMV 86056 at initial licensing and with each renewal. A lapse in garage liability is an independent suspension trigger under §320.27(9), separate from any bond-related issue.

Under Fla. Stat. §320.27(4)(b), an applicant who has at least two consecutive years of experience as a principal of a previously licensed Florida motor vehicle dealer can request a waiver of the 8-hour pre-licensing course from the Bureau of Dealer Services. The waiver is discretionary, not automatic. Documentation of the prior license, the principal role, and the time period must accompany the application. Applicants without prior Florida principal experience — including out-of-state dealers and corporate-officer first-time applicants — must complete the FLHSMV-approved course.

Annual premium ranges from roughly $250 to $3,750 on the $25,000 face amount, driven primarily by the principal’s personal credit. Excellent credit (FICO 700+) typically prices at 1–2% ($250–$500). Good credit prices at 2–4% ($500–$1,000). Fair credit (600–649) prices at 4–7% ($1,000–$1,750). Sub-600 credit prices at 7–15% ($1,750–$3,750), often with personal indemnity and sometimes collateral. Two-year terms are commonly available at a discount in standard markets.

The §320.27 bond is conditioned on the dealer’s compliance with the dealer licensing chapter and §320.131 (temporary tags). Its primary beneficiaries are retail buyers, lenders, and the state itself for unremitted taxes and fees. It is not a manufacturer-protection instrument. Manufacturer disputes arising under the franchise relationships statutes (§§320.60–320.70) — termination, non-renewal, transfer protests, new-line protests, warranty reimbursement disputes — proceed through the department’s administrative process and the courts, not through bond claims. Many franchise dealers carry separate dealer E&O coverage to handle those exposures.

Termination of the underlying franchise agreement by the manufacturer ends the basis for the VF license. The dealer must notify FLHSMV. If the dealer wishes to continue selling used vehicles from the same location, the typical path is to convert to a VI (independent) license — which requires a fresh application, an April 30 renewal calendar going forward, completion of the independent-track pre-licensing curriculum if not previously satisfied, and adherence to the VI 8-hours-every-2-years continuing education requirement. The §320.27 bond remains $25,000 on Form HSMV 86020 across both classes, so the surety bond itself usually persists with a class-change endorsement rather than a full re-bond.

For applicants with strong credit, the bond is typically issued the same business day after the quote is bound — automated underwriting clears most submissions within minutes. Substandard credit submissions usually take 1–2 business days because the file routes to a high-risk market and may require additional documentation (personal financial statement, recent tax returns, spousal or partner indemnity). The principal must sign the executed bond before filing. The surety company’s seal and a current power-of-attorney attachment must be present on the 86020 instrument; missing seals or expired POAs are routine rejection causes at the Bureau of Dealer Services.