What to Look for in a Surety Bond Provider
Choose surety bond providers with industry experience, strong financials, and excellent customer support for best protection.
Surety bonds are a vital and required step in the process of a dealership protecting themselves and helping to offer protection for the customers they do business with. Most states require a surety bond for any new dealer before becoming licensed.
It’s that important.
But if you are a new dealer or if you’re considering shopping around for a new surety bond provider as renewal approaches, how do you know what to look for in a surety bond provider?
It’s not as easy as simply hitting up Google and calling the first few agencies that populate in search. It’s much more complicated than that and there are specific requirements and considerations that every dealer should check off their list.
What to Look For?
Due to the critical nature of this coverage, both new dealers and those up for renewal need to be educated on what separates a good surety bond provider from a no-to-good one (and there are plenty out there in the market that may not be the best for your needs).
Evaluating potential providers starts with these 9 factors-
- Experience in the Auto Industry: Doing business with market experts is key here. Providers familiar with the unique challenges an auto dealer faces are often in a better position to help you get the coverage you need while providing expert guidance. They may also be well versed in the intricacies of your state’s regulatory climate.
- Licensing & Compliance: One of your first steps should be choosing a surety bond provider that is properly licensed and fully compliant with your state’s regulations. Since each state has specific requirements like bond amounts and coverage, don’t skip this step.
- Financially Stable: Research to be sure the provider is backed by a financially solid insurer or parent corporation. They will be better equipped to fulfill your bond obligations and provide reliable support when needed if they are not in fiscal trouble themselves. Check credit ratings and BBB if possible.
- Wide Range of Bonds: Always consider the range of bonds offered beyond just the standard motor vehicle bond. Inquire about other bonds that may be helpful like sales tax bond or dealer license bond. Choose a provider that offers a comprehensive selection of bonds that can meet your dealership's unique needs.
- Customer Support: Excellent customer service and support is essential when dealing with surety bonds and the claims against them. Look for a provider that has a reputation for being responsive and answers questions efficiently. Direct communication channels can enhance your overall experience with the provider if needed.
- Claims Process: You don’t want to assume you’ll have a claim against your surety bond but if you do, you want to know it will be handled fast and fair. Understanding how the provider handled claims and reputation for resolving them is important. A transparent process can mitigate potential disputes and help to preserve your dealership’s reputation in the eyes of the customer (and regulatory agencies).
- Costs & Fees: be sure to compare costs between providers and why it shouldn’t be the sole factor in who you choose, the costs and fees associated with coverage are part of the overall value of working value of that provider. And be cautious with providers that offer bargain basement rates…often that means worse customer service and hidden fees. You get what you pay for in this case.
- Technology & Accessibility: Ensure that the provider's tech infrastructure is secure, reliable, and compatible with how your dealership operates. A user-friendly interface and digital tools can simplify admin tasks, streamline documentation processes, and provide real-time access to bond information. But only if the provider is operating in the 21st century.
- Market Reputation & Reviews: Like so many things we all buy these days, it’s important to get third party information from past or current customers. Seek out references if available with other dealers who use the provider for the surety bond needs. Verify participation in related associations and check BBB. You’re looking for overall satisfaction levels, professionalism, and a reputation for reliability.
Dealer-Sure can help you purchase your new surety bond or if yours is up for renewal soon, we can help you compare costs for potential cost savings. Reach out to us and let’s see how we can help you today…