Illinois Auto Dealer Bond— $50,000 × Every Location You Operate

Under 625 ILCS 5/5-102, Illinois requires a separate $50,000 bond or certificate of deposit for each location at which you intend to act as a vehicle dealer. This per-location requirement is more stringent than many states that require only one bond regardless of the number of locations. Each bond ensures that consumers at every dealership location are protected against dealer violations. For context, see how Illinois compares in our <a href="/auto-dealer-bonds/" class="text-amber-400 underline hover:text-amber-300">50-state auto dealer bond guide</a>.

Under 625 ILCS 5/5-102, the bond or certificate of deposit must run for the term of the license or its renewal and expire no sooner than December 31 of the year for which the license was issued or renewed. Some guidance describes dealers becoming eligible to drop the bond after 60 consecutive months without delinquencies in remitting title/registration fees or taxes. Do not cancel your bond until the Secretary of State Dealer/Remitter Licensing Section confirms in writing that it is no longer required.

Illinois allows either a $50,000 surety bond or a $50,000 certificate of deposit from an Illinois financial institution. The CD must be in both the business name and the Secretary of State's name. While a CD avoids annual premium payments, it ties up $50,000 in capital per location. Most dealers choose the surety bond because it only costs 1-10% of the bond amount annually, freeing up working capital for inventory and operations. Learn more about <a href="/what-is-a-surety-bond/" class="text-amber-400 underline hover:text-amber-300">how surety bonds work</a> compared to other financial instruments.

Used vehicle dealer applicants must include certification from the prelicensing education program with the application (625 ILCS 5/5-102). The program covers topics such as licensure requirements, applicable taxes, consumer protection laws, and title and registration procedures. Confirm the current course length and schedule with the Secretary of State. Contact the Dealer/Remitter Licensing Section at (217) 782-7817 to schedule your training session.

Each $50,000 Illinois location bond typically costs $500-$5,000 annually. With excellent credit (750+), expect $500-$1,000 (1-2%). Good credit (680-749) costs $1,000-$2,000 (2-4%). Fair credit (620-679) ranges $2,000-$3,500 (4-7%). Below 620 may pay up to $5,000 (10%). A dealer with 3 locations and good credit would pay roughly $3,000-$6,000 total in annual bond premiums. Use our <a href="/tools/calculator/auto-dealer-bond/" class="text-amber-400 underline hover:text-amber-300">auto dealer bond calculator</a> for a personalized estimate or read our <a href="/auto-dealer-bonds/cost/" class="text-amber-400 underline hover:text-amber-300">auto dealer bond cost guide</a>.

The surety must give the Secretary of State advance written notice before a cancellation takes effect, under the terms of the bond. If your bond lapses, your dealer license is at risk of suspension. You must secure a replacement bond before the cancellation effective date to maintain continuous coverage and avoid license interruption.

Yes. We work with specialized carriers for higher-risk applicants and regularly approve applicants with credit scores as low as 500. Rates for the $50,000 Illinois bond with challenged credit typically range 5-10% ($2,500-$5,000 per location). We can often find competitive rates even for applicants with prior bankruptcies or tax liens. Our <a href="/surety-bond-cost/" class="text-amber-400 underline hover:text-amber-300">surety bond cost guide</a> explains how credit affects pricing.

The Illinois Secretary of State, Vehicle Services Department, Dealer/Remitter Licensing Section regulates all motor vehicle dealers in Illinois under the Illinois Vehicle Code (625 ILCS 5). The licensing section is located at 501 S. Second St., Springfield, IL 62756 and can be reached at (217) 782-7817.

Apply online with your business details and credit information for prompt submission on your $50,000 Illinois dealer bond. We place the bond in the business name and the Secretary of State's name as required under 625 ILCS 5/5-102. Submit the bond with your completed Form VSD 659, $1,000 annual license fee, garage liability insurance, and 8-hour dealer training certificate (first-time used car dealers). Remember that each dealership location needs its own separate $50,000 bond. Illinois also offers a certificate of deposit alternative, but most dealers choose the surety bond to avoid tying up $50,000 in capital per location. You pay nothing until your bond is issued. See our <a href="/how-to-get-a-surety-bond/" class="text-amber-400 underline hover:text-amber-300">step-by-step bonding guide</a> for the full process.

Licensed Illinois motor vehicle dealers. It is required by the Illinois Secretary of State, Vehicle Services Department (625 ILCS 5/5-102), as part of the dealer license. The bond amount is $50,000 per location.

We submit complete applications to the carrier promptly; most quotes come back within one business day. The carrier decides approval and the final premium, and you pay only when your bond is issued.