South Dakota Auto Dealer Bond$25,000 — Continuous Term

South Dakota auto dealer bonds ($25,000) cost $125-$2,500 annually depending on credit. Excellent credit (750+) typically qualifies for $125-$500 per year (0.5-2%). Good credit (680-749) runs $500-$1,250 (2-5%). Fair credit ranges $1,250-$1,875 (5-7.5%). South Dakota's lower bond amount means lower premiums compared to many states. We find the best rate from multiple carriers.

No. South Dakota motor vehicle dealer bonds do not have a fixed expiration date. Your bond remains active as long as annual renewal payments are made on time. However, the bond can be canceled if the surety gives written notice of cancellation to both the Department of Revenue and the dealer, with cancellation becoming effective 30 days after mailing the notice. This is different from most states where bonds expire and must be refiled annually.

Under SDCL 32-6B-7, anyone who sells more than 5 vehicles in a 12-month period must obtain a motor vehicle dealer license and the accompanying $25,000 surety bond. All businesses must become licensed with the Motor Vehicle Division before any sales transactions occur. Contact your local Motor Vehicle Dealer Agent to begin the application process using Form 1400.

South Dakota requires public liability insurance of at least $300,000 for vehicle dealers, used vehicle dealers, and motorcycle dealers. This is separate from your $25,000 surety bond. Notable exception: trailer dealers, snowmobile dealers, mobile home dealers, and boat dealers are not required to carry this liability insurance. The bond protects consumers from fraud; the insurance covers physical liability.

Your initial South Dakota dealer license is valid for 12 months and must be renewed annually through the DMV Dealer System online. Your surety bond does not need to be refiled at renewal unless the dealership name changes or you obtain a new bond. The annual license renewal is done through the online system, making it straightforward compared to many other states.

Yes. South Dakota's $25,000 bond amount is one of the lowest in the country, which makes approval easier even with challenged credit. Approval is possible even with credit challenges. Even with credit scores below 600, approval is typically possible. The lower bond amount means your premium will be more affordable than in states requiring $50,000 or $75,000 bonds.

South Dakota has tiered bond amounts: $5,000, $10,000, $20,000, or $25,000 depending on the dealer type and license category. The $25,000 bond is required for new motor vehicle dealers. Contact the Motor Vehicle Division at the Department of Revenue to confirm which bond amount applies to your specific dealer category before applying.

Any person who suffers a financial loss due to dealer fraud, misrepresentation, or violation of South Dakota motor vehicle laws can file a claim against your $25,000 bond. The surety company investigates the claim and, if valid, pays up to the bond amount. You must then reimburse the surety for all amounts paid plus investigation and legal costs. Maintaining compliance with SDCL Chapter 32-6B helps prevent claims.