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Last updated: General Utah auto dealer bond information — confirm current requirements with the licensing authority.

Utah Auto Dealer License and Bond

In Utah, you need a dealer license from the Motor Vehicle Enforcement Division (MVED) if you sell, display, or offer three or more motor vehicles or off-highway vehicles in any 12-month period. Before your license is issued, you file a corporate surety bond with the administrator on Form TC-450.

Quick answer
Motor vehicle and special equipment dealers post $75,000, motorcycle, OHV, small trailer dealers and crushers post $10,000, and body shops post $20,000.
  • Who requires it: Utah Motor Vehicle Enforcement Division (MVED), within the State Tax Commission; Utah Code § 41-3-205.
  • Timing: We submit complete applications to the carrier promptly; most quotes within one business day.
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Official Utah Requirements

"The total aggregate liability on the bond to all persons making claims, regardless of the number of claimants or the number of years a bond remains in force, may not exceed the amount of the bond."
Utah Code § 41-3-205, Utah Legislature • View Official Requirements →

Your bond amount depends on your dealer type

Your required bond amount is set by your license type. A motor vehicle dealer's license, new or used, requires a $75,000 bond. A special equipment dealer's license also requires $75,000. A motorcycle, off-highway vehicle (OHV), or small trailer dealer's license, and a crusher's license, each require $10,000. A body shop's license requires $20,000. A small trailer is a trailer with a shipping weight of more than 750 pounds and less than 2,000 pounds. The MVED page also lists large trailer dealers at $75,000, so check your category with MVED.

The bond protects a person who suffers loss from a dealer's fraud, fraudulent representation, or a violation of Section 41-3-210. Total liability on the bond cannot exceed the bond amount, no matter how many claimants or years are involved. Your surety must be a corporate surety licensed to do business in Utah with a rating of at least B+ from the A.M. Best Company.

How a claim on the bond works

A claim is paid only after a waiting period. A surety or principal may not pay any claimant until six months have passed from the date the first written claim on the bond was filed. If valid claims together exceed the bond amount, the proceeds are distributed pro rata among the valid claimants. To preserve a claim, the claimant files it in writing with the administrator within one year after the cause of action arose, and any lawsuit must begin within two years after the claim was filed. A claimant is awarded attorney fees in cases successfully prosecuted or settled against the surety or principal if the bond has not been depleted.

If you lose possession of the required bond, your license is automatically suspended, and you cannot use your licenses or plates until the required bond is on file with the administrator and your license is reinstated. Operating without a bond in effect is also a ground for suspension or revocation. Under Section 41-3-701, violating the chapter is a class B misdemeanor, and acting as a dealer without a license is a class A misdemeanor.

Steps and documents to get licensed

A license from the administrator is required before you act as a dealer. You complete and sign Form TC-301, the Bonded Motor Vehicle Business Application. Your bonding company fills out Form TC-450, and you sign it in front of a notary. MVED says the bond form must have a revision date of 10/13. You also secure a sales tax number for the dealership from the Utah State Tax Commission. Each owner, partner, or corporate officer submits fingerprints for a background check. After you submit the application packet, MVED allows five to ten working days for a site inspection, and after the site passes you receive your dealer license within three to five working days.

Fees

License fees are determined by the commission, not fixed in the code. On the MVED page, a new or used motor vehicle dealer license is $127, and a new or used motorcycle, OHV, or small trailer dealer license is $51. Each owner, partner, or corporate officer pays $30 for a BCI fingerprint check. What you pay is a share of the bond amount, set by the surety from your credit and finances.

Renewal and when the bond ends

Every license issued under the chapter expires on June 30 each year. At renewal, a new or used motor vehicle, motorcycle, or small trailer dealer must complete a three-hour class. The bond may be continuous in form, and Form TC-450 runs during the license and all lawful renewals. If your surety gives notice to withdraw, the withdrawal does not take effect until sixty days after the administrator receives that notice.

Your principal place of business and extra locations

The administrator cannot issue a dealer license to an applicant who does not have a principal place of business. Your location needs a permanent sign of at least 24 square feet. A dealer must obtain a supplemental license for each additional place of business. To get a supplemental license for an additional place of business, you must be bonded under Section 41-3-205. For a used motor vehicle dealer, a supplemental license for a permanent additional place of business also requires that the dealer independently satisfy the bond requirements for that location.

Steps

  1. Confirm you need a license. If you sell, display, or offer three or more motor vehicles or off-highway vehicles in any 12-month period, you must be licensed by MVED.
  2. File the application. Complete and sign Form TC-301, the Bonded Motor Vehicle Business Application.
  3. Get your bond. Have your surety fill out Form TC-450 for your license type's amount, and sign it in front of a notary.
  4. Get a sales tax number. Secure a sales tax number for the dealership from the Utah State Tax Commission.
  5. Submit fingerprints. Each owner, partner, or corporate officer submits fingerprints for a background check.
  6. Pass the site inspection. After you submit the packet, MVED allows five to ten working days for a site inspection, then issues your license within three to five working days once the site passes.

Frequently asked questions

Do I need a license to sell cars in Utah?

Yes. You need a dealer license from MVED if you sell, display, or offer three or more motor vehicles or off-highway vehicles in any 12-month period. Selling only vehicles you have owned for over 12 months does not make you a dealer.

How much is the Utah auto dealer bond?

A motor vehicle dealer's license and a special equipment dealer's license require $75,000; a motorcycle, OHV, or small trailer dealer or crusher requires $10,000; and a body shop requires $20,000. The MVED page also lists large trailer dealers at $75,000.

What form is the bond?

It is Form TC-450, the Bond of Motor Vehicle Dealer, Crusher or Body Shop. Your surety fills it out and you sign in front of a notary.

Does the bond have to be continuous?

The statute says the bond may be continuous in form. Form TC-450 runs during the license and all lawful renewals.

When does my dealer license expire?

Every license expires on June 30 each year, and at renewal a new or used motor vehicle, motorcycle, or small trailer dealer must complete a three-hour class.

What happens if I lose the bond?

Your license is automatically suspended, and you cannot use your licenses or plates until the required bond is on file with the administrator and your license is reinstated.

How are claims paid?

No payment is made until six months after the first written claim, and if valid claims exceed the bond amount they are paid pro rata. Total liability cannot exceed the bond amount.

Who can make a claim on the bond?

A person who suffers loss from a dealer's fraud, fraudulent representation, or a violation of Section 41-3-210 may bring an action on the bond.

How do I get a Utah 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.

Utah 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 Utah bonded title page, or compare title bond rules across states.

Four situations dealers run into have their own guides: salvage and rebuilt vehicle titles, a trade-in from another state with no title, trailer title rules and VIN corrections on a trade-in.

Stocking more than cars? See motorcycle titles for dealers, a boat with no title and titling an older unit without paperwork.

Eric Drummond, Licensed Surety Producer
Reviewed by
Eric Drummond, Licensed Surety Producer

All content is researched from official state and federal sources (.gov). BuySuretyBonds.com works with Treasury-listed surety carriers.

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