Florida Salvage Motor Vehicle Dealer Bond (SD)-- $25,000 §320.27 Bond + Garage Liability Exemption

A Florida SD salvage motor vehicle dealer 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)5 for applicants seeking a salvage motor vehicle dealer license. The bond is filed on Form HSMV 86020 -- the same form used by VF, VI, VW, and VA classes -- alongside the dealer license application (Form HSMV 86056). The bond guarantees the SD dealer’s compliance with Fla. Stat. 320.27 and related salvage-title sections in Chapter 319. Unlike the other four motor vehicle classes, SD applicants are statutorily exempt from the garage liability insurance requirement.

Yes. Fla. Stat. 320.27(3) imposes the garage liability requirement -- $25,000 combined single-limit bodily injury and property damage plus $10,000 personal injury protection (PIP) -- on VF, VI, VW, and VA license classes. The statute specifically excludes salvage motor vehicle dealers from this requirement. The exemption recognizes the operational reality that an SD facility is not a retail showroom or test-drive lot; it is an industrial dismantling and salvage processing site. Most SD dealers carry commercial general liability (CGL) for property and worker exposure, but they are not statutorily compelled to file garage liability with FLHSMV. The annual insurance savings are typically $1,500 to $3,500 per year compared to a VF/VI/VW operation.

An SD license authorizes the dealer to acquire salvage vehicles (vehicles declared a total loss or otherwise branded SALVAGE under Fla. Stat. 319.30), dismantle them for parts resale, process salvage and rebuilt titles, and sell rebuilt-title vehicles either retail or wholesale. The SD license does NOT authorize sales of clean-title (non-branded) used vehicles. A dealer who wants to source salvage AND sell clean-title used cars retail typically holds both an SD license and a VI (independent) license -- two licenses, two $25,000 bonds, two Form HSMV 86020 filings.

For applicants with strong credit (FICO 700+), the SD bond premium is typically $250 to $500 per year -- 1% to 2% of the $25,000 face amount. Fair credit (FICO 600-649) ranges from $1,000 to $1,750 per year. Below 600 credit typically produces $1,750 to $3,750 per year in specialty markets. The SD class is not surcharged versus VI or VW classes; surety underwriters treat all five motor vehicle classes identically for premium-rating purposes. Multi-year terms (2-year and occasionally 3-year) can produce a 5%-15% discount.

Form HSMV 84099 is the Rebuilt Vehicle / Physical Examination Report. It is the FLHSMV form used to inspect a vehicle that has been rebuilt from salvage so that the title can be rebranded from SALVAGE to REBUILT under Fla. Stat. 319.14. The inspection covers VIN verification, source-of-parts documentation, and component matching. An SD dealer who acquires a salvage vehicle, rebuilds it, and intends to sell it must complete the HSMV 84099 inspection through an FLHSMV-approved inspector before the title can be reissued with the REBUILT brand. Selling a rebuilt vehicle without the rebrand is a Chapter 319 violation and is bondable conduct.

Yes. The $25,000 SD bond is conditioned on the dealer’s compliance with Fla. Stat. 320.27 and Fla. Stat. 320.131, and it indemnifies retail buyers and other persons against loss caused by false or fraudulent representation, undisclosed title brands, odometer fraud, failure to deliver a clear title (with the correct brand disclosed), and failure to remit fees and taxes. Salvage-title and rebuilt-title fraud -- failing to disclose the SALVAGE or REBUILT brand to a buyer -- is among the most common claim categories on the SD class specifically because the underlying inventory is title-branded.

The SD license expires April 30 annually -- the same cycle as VI (independent), VW (wholesale), and VA (auction) licenses. The annual renewal fee is $75. Under Fla. Stat. 320.27, renewal applications must be filed at least 30 days before expiration. A late renewal filed within 45 days of expiration carries a $100 late fee; once 45 days have passed, the dealer must file a brand-new application with a fresh $300 application fee and a new background check. The surety bond must remain in continuous force; gaps in coverage are independent grounds for license suspension under Fla. Stat. 320.27(9).

Florida is the second-largest source state for salvage inventory in the United States, behind Texas. Atlantic hurricane season runs June 1 through November 30 and peaks in August, September, and October. Named storms produce surges of flood-totaled and wind-totaled vehicles that flow into the salvage auction system through Copart, IAA, and Manheim Salvage. SD dealers experience their highest inventory volumes -- and their highest claim exposure -- during and immediately after the Q3/Q4 storm cycle. Underwriters do not surcharge for this seasonality, but lenders sometimes adjust floor-plan terms.

Like the other motor vehicle classes, Fla. Stat. 320.27(3) requires a permanent non-residential location with an equipped office, signage, posted hours, and a phone listed in the dealer’s name. SD operations carry significantly stricter local-zoning overlays because dismantling is classified as an industrial activity in nearly every Florida municipality. Most counties limit SD operations to industrial-zoned parcels, often with conditional-use permits, environmental review, and Department of Environmental Protection (DEP) stormwater and hazardous-fluid compliance plans. A retail-zoned parcel that works fine for a VI dealership will almost never qualify for an SD operation.

Yes for rebuilt-titled vehicles -- the SD license authorizes both wholesale and retail disposition of rebuilt-branded vehicles. For wholesale of clean-title (non-branded) vehicles, an SD dealer needs an additional VW (wholesale) license. The dual SD + VW combination is common among Florida operators who supply rebuilt and salvage-source inventory to other dealers. Each license requires its own $25,000 bond on Form HSMV 86020 -- the bonds are not interchangeable across licenses.

Under Fla. Stat. 320.27(4)(b), SD applicants complete the same 8-hour pre-licensing course required for independent, wholesale, and auction dealers, delivered by an FLHSMV-approved provider. The curriculum covers Chapter 320 compliance, Chapter 319 title processing (which is particularly relevant for SD operations), Chapter 501 consumer protection, recordkeeping, and operations. Continuing education is not statutorily mandated for SD class on a 2-year cycle the way it is for VI (independent), but many SD operators voluntarily take CE because the salvage and rebuilt-title rules change more often than the core dealer rules.

For applicants with strong credit, the SD bond can typically be issued the same business day after the quote is bound -- many submissions clear automated underwriting in minutes. Substandard credit submissions take 1-2 business days as the file routes to a high-risk market and may require a personal financial statement, recent tax returns, or spousal indemnity. The principal must sign the executed bond before it is filed with FLHSMV; the surety’s seal and power-of-attorney attachment must be present on the bond as filed.