Free Investment Advice

Source: dealersclass.com How much does bonds cost?

The going rate for a $10,000 bond is only about $300 per year. The going rate for a $50,000 bond is between $800 and $1,500 per year depending on your credit. For example, let’s say your bond premium is $1,000 per year. WOW! That’s only $83.33 per month! Bonds are more affordable than you think! All you need to do is sell one car and the profit will pay for your entire bond.

What if you have bad credit?

In general, the better your credit is, the cheaper your bond. If you have horrible credit such a bankruptcy, there are still bonds available, but they will cost closer to $1,500 per year instead of closer to $800 per year. If your credit is the worst there is, consider getting a co-signer or a business partner with good credit. The DMV allows you to put multiple owners on just one dealer license!

Where do you buy a bond?

You can look in the yellow pages under bonds and you will find tons of companies. However, bond companies in the yellow pages tend to be pricey. In class, our real dealer instructor will supply you with contact information to the bond company he uses. The truth is DEALERS KNOW WHERE THE CHEAP BOND COMPANIES ARE AT!

Can you be your own “bond company”?

Yes! The DMV allows you to deposit $50,000 in your bank in the form of a Certificate of Deposit. This satisfies the dealer bond requirement. So if you have extra equity in your house, this may be an option. However, only post a cash bond as your last resort - when you post a cash bond, you can’t touch the money until 3 years after you end the business, and that won’t happen since you’ll probably be a dealer for a lifetime! You’re better off going through a bond company and using the extra cash to buy cars.