VS-3

The Dealer Bond Under New York State Vehicle and Traffic Law Section 415 (6-B) (Form VS-3) is a legal document required by the New York State Department of Motor Vehicles for auto dealers to obtain or maintain a registration certificate. This surety bond acts as a financial guarantee that the dealer will fulfill specific legal obligations, including paying all valid bank drafts for vehicle purchases, transferring good titles to buyers, and safeguarding customer deposits. It also ensures the payment of any fines or penalties imposed by the Commissioner of Motor Vehicles and provides a means for consumers or other dealers to recover losses resulting from the dealer's non-compliance or fraudulent actions.

The bond amount varies depending on the type and volume of vehicles sold, with specific thresholds for new motor vehicle dealers and those selling used vehicles. It must be issued by a surety insurer authorized to conduct business in New York State and remains in effect until the dealer's registration is revoked or otherwise terminated.

If a dealer fails to meet their obligations, the surety is liable for valid claims up to the maximum amount of the bond, though the dealer remains responsible for reimbursing the surety for any payouts made. Certain specialty dealers, such as those exclusively selling motorcycles, trailers, or snowmobiles, may be exempt from this requirement.