New Hampshire Auto Dealer Bond
If you sell five or more vehicles at retail in New Hampshire in a 12-month period, you need a dealer license and a bond, which RSA 261:98 sets at $25,000 while RSA 261:100 lists a different schedule. This guide explains the bond behind your New Hampshire auto dealer license, who it protects, and how to apply.
- Who requires it: New Hampshire Department of Safety, Division of Motor Vehicles; RSA 261:98.
- Timing: We submit complete applications to the carrier promptly; most quotes within one business day.
Official New Hampshire Requirements
"A separate bond shall be required for each different name under which the dealer conducts his business and for each community in which the dealer has a place of business."New Hampshire General Court, RSA 261:98 • View Official Requirements →
Who must bond, and for how much
New Hampshire requires every retail vehicle dealer, auto wholesale dealer, and automotive recycling dealer to obtain a bond or equivalent proof of financial responsibility, and certain utility dealers must bond too if required by rule of the commissioner. RSA 261:98 sets the amount at a $25,000 surety bond from a surety company authorized to transact business in the state by the insurance department. RSA 261:100 lists a different schedule — $20,000 for a dealer under one year in business, $15,000 for over one but under two years, and $10,000 after two years — so confirm the current amount with the New Hampshire Division of Motor Vehicles before you file.
If you belong to an automobile dealers association that the director has recognized, you may instead be covered by that association's $100,000 bond rather than filing your own. In place of a surety bond, the department may allow you to deposit a certificate of deposit or an irrevocable letter of credit with a face value equal to the bond amount. If your surety cancels, it must give 60 days' notice to the department and to you, and you must also notify the department of the cancellation.
What you pay is a share of the bond amount, set by the surety from your credit and finances.
What the bond protects
The bond protects a natural person who buys a vehicle from a dealer, automotive recycling dealer, or utility dealer and suffers a loss. Covered losses include the dealer's default or nonpayment of bank drafts used to buy vehicles, a failure to deliver title free of liens, a vehicle that turns out to be stolen, and a dealer's intentional or knowing failure to disclose the vehicle's actual mileage at sale. Towns, cities, and the state can recover against the bond only for dealers that are appointed dealer agents who collect and remit fees.
How a claim works
A buyer must first obtain a final judgment against the dealer in a court of competent jurisdiction before recovering against the bond. No suit to enforce the bond may be brought more than one year after the event that gave rise to the claim. The surety is never liable for total claims above the bond amount, no matter how many claims are made or how many years the bond stayed in force.
Getting your dealer license
A valid dealer license under RSA 261:103-a is required before you sell five or more vehicles at retail to the public, or export five or more, in any 12-month period. Your application must include proof of a surety bond, or proper alternative proof of financial assurance. The bond or its equivalent is filed with the department.
Your application also needs:
- A full description of your permanent, established place of business, including the town or city and the street and number.
- Certification from the municipality that your establishment complies with all applicable local zoning ordinances.
- A criminal history records check for the applicant and its members, partners, officers, and directors.
The director may also require an applicant to attend an instructional class as a condition of getting a license. If you fail to post the bond, it is a misdemeanor, each day of noncompliance is a separate offense, and your right to issue temporary plates is revoked until you comply.
Fees, renewal, and expiry
Each application must include a license fee of $250. If you apply during the second year of the license cycle, the fee is $125. Licenses expire biennially in even-numbered years, in the month the director designates.
One bond per name and per place of business
A separate bond is required for each different name you do business under and for each community where you have a place of business. Likewise, a separate license is required for each separate place of business in a separate town or city.
Steps
- Confirm your dealer type. Check whether you are a retail vehicle, auto wholesale, or automotive recycling dealer, since these dealers must bond.
- Set up your place of business. Establish a permanent location and get municipal certification that it meets all applicable local zoning ordinances.
- Obtain the bond. Arrange the bond (RSA 261:98 says $25,000; RSA 261:100 lists a different schedule), or a certificate of deposit or irrevocable letter of credit of equal face value.
- Clear the background check. Complete a criminal history records check for the applicant and its members, partners, officers, and directors.
- File with the department. Submit your application with proof of the bond and the $250 fee, or $125 in the cycle's second year.
- Renew on schedule. Track your biennial expiry in even-numbered years and renew before the license lapses.
Frequently asked questions
How much is a New Hampshire auto dealer bond?
RSA 261:98 sets it at $25,000. RSA 261:100 lists a different schedule by years in business, so the two sections do not match.
Who needs a New Hampshire car dealer license?
Anyone who sells five or more vehicles at retail to the public, or exports five or more, in any 12-month period must have an established place of business and a dealer license under RSA 261:103-a.
What does a New Hampshire dealer license cost?
The license fee is $250, or $125 if you apply during the second year of the license cycle.
Can I use something other than a surety bond?
Yes. In place of the bond, the department may allow a certificate of deposit or an irrevocable letter of credit with a face value equal to the bond amount.
What does the bond cover?
It protects a natural person who buys a vehicle and loses money through the dealer's unpaid drafts, undelivered clear title, a stolen vehicle, or undisclosed mileage. A buyer must win a final judgment and bring suit within one year of the event.
What happens if my surety cancels the bond?
The surety must give 60 days' notice to the department and to you, and you must notify the department of the cancellation.
When does my New Hampshire auto dealer license expire?
Licenses expire biennially in even-numbered years, in the month the director designates.
What if I use more than one business name or location?
A separate bond is required for each business name and each community where you have a place of business, and a separate license is required for each place of business in a separate town or city.
How do I get a New Hampshire auto dealer bond?
Request a quote with the form on this page. A licensed agent submits your application to a Treasury-listed surety carrier; once the carrier issues your bond, file it as the requiring agency directs.
What happens after I apply?
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.
Compare neighboring states on our Maine, Massachusetts, and New York dealer bond pages.
New Hampshire dealers: vehicles without a title
Trade-ins and auction units sometimes arrive with a missing or defective title. Read how a bonded title works on the New Hampshire bonded title page, or see how bonded titles work in other states.
Four situations dealers run into have their own guides: rebuilt units that need a title, out-of-state purchases with no title, trailers with no title and title errors found at intake.
Stocking more than cars? See motorcycle titles for dealers, a boat with no title and titling an older unit without paperwork.
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