Wisconsin Auto Dealer Bond Requirements

How much is the Wisconsin dealer bond, and who does it protect?

Wisconsin ties the bond amount to your license type. The amounts below come from Wis. Stat. ch. 218 and the Department of Transportation's rules.

• Motor vehicle dealers (new or used, selling anything other than motorcycles only) provide a bond or irrevocable letter of credit of not less than $50,000.
• Dealers who sell motorcycles and no other motor vehicles provide a bond or irrevocable letter of credit of not less than $5,000.
• Wholesalers and wholesale dealers provide a bond or irrevocable letter of credit of not less than $25,000.
• Under Wis. Stat. s. 218.11, recreational vehicle (RV) dealers provide a bond or irrevocable letter of credit of not less than $50,000, while Form MV2511 lists the RV bond "when a bond is required by the Department", so confirm the RV requirement with the Wisconsin Department of Transportation.
• Auction dealers furnish a corporate surety bond of $25,000.
• Salvage dealers may file a bond or other collateral of not less than $25,000 in place of a current financial statement, and the Department may require a bond.
• Moped dealers have no bond amount set in the statute, and a bond is needed only when the Department requires one.

For reasonable cause to doubt a dealer's financial responsibility or compliance, the Department may require an additional bond of not less than $5,000 and not more than $100,000 on top of the main bond. If a motor vehicle dealer uses a letter of credit instead of a surety bond, Wisconsin provides Form MV1046 for that purpose.

The statute and the bond form word the beneficiary differently: the statute says the bond is "executed in the name of the department of transportation", while Form MV2511 says it runs to the "State of Wisconsin for the benefit of any aggrieved person". You can read both the bond text on Form MV2511 and the statute for the exact wording.

Getting your dealer license and documents

A dealer is anyone engaged wholly or in part in the business of selling or leasing motor vehicles, including motorcycles, whether or not the dealer owns them. You must provide and keep the required bond in force; failing to furnish and keep any required bond in force is a ground to deny, suspend, or revoke a license. The bond is made on the Department's Form MV2511, which lists dealer, wholesaler, RV, salvage, auction, and moped bonds. The Department's rules in Trans 138 set facility, record, and license requirements for motor vehicle dealer, wholesale dealer, and auction dealer licenses. Confirm the application form and established-place-of-business standards with the Wisconsin Department of Transportation.

Renewal and expiration

Wisconsin business licenses, including dealer, moped, RV, auction, wholesaler, and salvage licenses, run for 2 years. The security period runs together with that biennial license. Form MV2511 can be marked "continuous"; a continuous bond does not automatically expire with the license and continues from year to year as a new and separate obligation for each 12-month period. The face amount of the bond applies separately to each 12-month period. Under Form MV2511, the surety can end the bond by giving the Department 60 days' written notice, and if the bond is not immediately replaced, the license is suspended or revoked until a comparable bond is obtained.

Frequently asked questions

Compare neighboring states' dealer bond pages for Minnesota, Iowa, Illinois, and Michigan.