West Virginia Auto Dealer Bond
West Virginia dealers post a $25,000 bond on Form MV-126-DS-P, which covers the license year that runs July 1 to June 30. A covered dealer with no paid claims, no license suspension or revocation and no civil penalties in the three years before the fees are assessed may stop keeping the bond, but still pays the $150 Dealer Recovery Fund fee unless the fund is at or above $3,000,000 on July 1.
- Who requires it: West Virginia Division of Motor Vehicles; W. Va. Code §17A-6-4(f).
- Timing: We submit complete applications to the carrier promptly; most quotes within one business day.
Official West Virginia Requirements
"The bond shall be effective as of the date on which the license certificate sought is issued."W. Va. Code §17A-6-4 • View Official Requirements →
The $25,000 bond and who it covers
West Virginia sets the dealer bond at $25,000, and you file it on the commissioner's prescribed form, Form MV-126-DS-P. The surety on the bond must be a corporate surety authorized to do business in West Virginia. The bond protects a purchaser, seller, financial institution or agency, or the State of West Virginia against fraud or a fraudulent representation in your business that causes a financial loss. It takes effect on the date your license certificate is issued.
A separate license certificate is required for each business you run as a new motor vehicle, used motor vehicle, house trailer, trailer, recreational vehicle or motorcycle dealer, a used parts dealer, or a wrecker or dismantler. The West Virginia DMV lists the $25,000 surety bond as a licensing requirement, and its page notes the bond is not required for the repo-financial institution, manufacturer or transporter license classes. Confirm with the West Virginia DMV whether your license class must post the bond and whether it qualifies for the exemption below.
The $150 Dealer Recovery Fund and the three-year exemption
If you sell new or used motor vehicles, new or used motorcycles, trailers, multitrailers or recreational vehicles, you also pay an annual Dealer Recovery Fund fee of $150 on top of the bond. A dealer in those types who, for the three years immediately before the fees are assessed, has had no claim paid against the bond or the fund, has not had the license suspended or revoked, and has not been assessed civil penalties is not required to continue to keep the bond. That dealer still pays the $150 fund fee, unless the fund is at or above $3,000,000 on July 1. Confirm with the West Virginia DMV whether the $150 fee is waived this year.
How a claim works: the bond first, then the fund
The surety pays on the bond when fraud or a fraudulent representation in the dealer's business causes a purchaser, seller, financial institution or agency, or the State a financial loss. The Dealer Recovery Fund considers paying a claim only after any dealer surety bond required under the statute has been exhausted. Payments from the fund are made upon order of the Commissioner of Motor Vehicles. A claim must be submitted within six months of the date of sale or the date the division is made aware of the claim. For years a dealer did not maintain the bond, the board may consider certain claims that would otherwise be payable under the bond up to $50,000 for each of those licensing years. No dealer can submit a claim against the fund unless it has contributed to the fund for at least three years.
Your West Virginia dealer license: documents and fees
Along with the bond, you file a certificate of insurance on Form DMV-126-DS-J showing at least 20/40/10 dealer liability coverage — $20,000 for bodily injury to or death of one person in an accident, $40,000 for two or more persons, and $10,000 for property damage, in any one accident. The DMV also asks for a personal property tax receipt for each owner or corporate officer, or a county affidavit stating no taxes are owed, along with photos of the dealership and its sign with letters no less than four inches high, a valid West Virginia business license, and a background check. You can find both forms on the DMV forms page.
The initial application fee is $250 for new, used, house trailer, trailer, motorcycle, recreational vehicle and wrecker/dismantler/rebuilder licenses, and half of it is refundable if the application is denied; annual renewal fees are set by type.
| License type | Annual renewal fee |
|---|---|
| New motor vehicle dealer | $100 |
| Used motor vehicle dealer | $100 |
| Trailer dealer | $25 |
| Recreational vehicle dealer | $100 |
| Motorcycle dealer | $10 |
| Wrecker/dismantler | $15 |
After you apply, the commissioner may withhold issuing the license certificate for a period not to exceed 20 days while the application is investigated.
License year, bond term, and cancellation
Form MV-126-DS-P covers acts and omissions during the license year that runs July 1 to June 30, which is the DMV's licensing year for these classes. The statute also states the bond is effective as of the date the license certificate is issued. If the bond is canceled by the surety or the principal, the surety must notify the West Virginia DMV by certified mail within 30 days. If the surety fails to give that notice, the bond stays in full force and effect until the DMV receives it.
Your established place of business
Each dealer location must be an established place of business as the statute defines it. The DMV wants photos of the dealership and a sign whose letters are no less than four inches high.
Steps
- Know the amount. Plan for a $25,000 bond on Form MV-126-DS-P.
- Get the bond. Obtain the bond from a corporate surety authorized to do business in West Virginia.
- Add your insurance. Prepare a 20/40/10 certificate of insurance on Form DMV-126-DS-J.
- Gather DMV documents. Collect a personal property tax receipt for each owner or corporate officer, or a county affidavit stating no taxes are owed, plus photos of the dealership and its sign with letters at least four inches high, a valid West Virginia business license, and your background check.
- Pay the fees. Submit the $250 application fee, and pay the $150 Dealer Recovery Fund fee if you sell a covered vehicle type.
- File and get your license. Once the DMV issues the license certificate, your bond is effective as of that date.
Frequently asked questions
How much is the West Virginia auto dealer bond?
It is $25,000, filed on Form MV-126-DS-P.
What does the bond cost me?
What you pay is a share of the bond amount, set by the surety from your credit and finances.
Who does the bond protect?
It protects a purchaser, seller, financial institution or agency, or the State of West Virginia against fraud in your business that causes a financial loss.
Does every license class need the bond?
The DMV lists the $25,000 bond as a requirement but says it is not required for the repo-financial institution, manufacturer or transporter classes.
Can I ever stop keeping the bond?
A covered dealer with no paid claims, no license suspension or revocation and no civil penalties in the three years before the fees are assessed is not required to continue to keep the bond, though the $150 fund fee still applies unless the fund is at or above $3,000,000 on July 1.
What is the Dealer Recovery Fund fee?
Dealers who sell new or used motor vehicles, motorcycles, trailers, multitrailers or recreational vehicles pay an annual $150 fund fee on top of the bond.
How does a fund claim work?
The fund considers a claim only after the dealer's surety bond is exhausted, and the claim must be submitted within six months of the sale or of the date the division learns of it.
When does the bond term run?
Form MV-126-DS-P covers the license year from July 1 to June 30.
How do I get a West Virginia 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.
See neighboring states' dealer bond pages for Virginia, Ohio, Pennsylvania, Kentucky and Maryland.
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