Connecticut Motor Vehicle and Rental Bond
What is a Connecticut Motor Vehicle Leasing and Rental Bond?
The Connecticut Department of Motor Vehicles requires any person or business that rents or leases vehicles to file a $10,000 surety bond as part of their licensing.
A surety bond is different from insurance. While the purpose of your insurance policy is to protect your business, a bond policy helps to protect your customers. Typically, a bond involves three parties:
- The surety or issuer of the bond, such as NNA Surety Bonds
- The obligee or licensing agency requiring the bond, such as the Connecticut DMV
- The principal or the leasing company posting the bond
Surety bonds are often a licensing requirement for professionals or businesses, especially in industries with special regulations and laws to protect consumers.
How much does a leasing and rental company bond cost in CT?
In Connecticut, vehicle leasing and rental companies must post a $10,000 bond; however, you are only obligated to pay a percentage of this amount as an annual premium.
Your premium rate will be influenced by several factors, including:
- Your bond amount
- Your company’s finances
- Your personal credit rating
Of these factors, your credit rating is the most important in determining your bond premium. Currently, NNA Surety Bonds offers Connecticut leasing and rental company bonds with annual rates as low as $100 based on your credit.
Get your Motor Vehicle Leasing & Rental Company Bond.
How does a vehicle leasing and rental bond work?
Surety bonds are not insurance. The purpose of a bond is to protect the general public by promoting law-abiding practices. A bond also provides compensation for damages to consumers if your business fails to comply with the law. Here's how it works.
In the event that your vehicle leasing company breaks a law resulting in damages, a claim can be made against your bond. If the claim is upheld, your bond is used to pay for these damages, up to the full amount of the bond. Afterward, you will be required to pay this back to the surety company.
It’s important to note that upheld claims can make securing or renewing bonds difficult, if not impossible. As a bond is required to maintain your business license, this can jeopardize your company. In this way, surety bonds provide an extra level of consumer protection by encouraging lawful business practices.
Why do I need a surety bond for my vehicle rental company in CT?
Before you can obtain your business license, you must file a bond with the Connecticut DMV. So, you cannot operate your vehicle rental and leasing company without one.
State and local agencies will often require a surety bond as part of their licensing process when they feel that the public may need an extra level of protection or when it’s important to encourage regulatory compliance from businesses. Usually, this is due to the specific industry having complicated regulations or when some form of contract is made between a business and its customers.
Get your free Connecticut Vehicle Rental & Leasing Company Bond quote.
What else will I need for my business license?
Aside from a $10,000 surety bond, you will need to provide the Connecticut DMV with several other items to obtain your vehicle rental and leasing business license, including:
- An Application and License for Motor Vehicle Leasing Companies (form E-229)
- A Leasing/Renting License Compliance Certification (form R-289)
- A Business License Personnel List (form K-26)
- A Connecticut Special Financial Responsibility Insurance Certificate (form R1325D)
- A Certificate of Business Status (form K-198)
- A $300 licensing fee
For a complete list of required forms, documents, and fees, visit the Connecticut Department of Motor Vehicles’ website.
Need a bond quote? Call NNA Surety Bonds at 855-575-1063.