Auto Dealer Surety Bonds in Claim Process
In this installment of surety bonds we will continue to look at major points of the claim process in auto dealer surety bonds.
Only certain consumers are eligible to process a claim against the auto dealerships surety bond.
– Consumer Purchaser: Most of the claims that a consumer will make are related to the auto dealer’s failure to report the sale and not producing a title for the vehicle. This creates a multitude of issues for the buyer. Other claims involve the dealership not paying off the vehicle that was traded in, when the mileage on the odometer has been changed or the condition of the car was not reported and clearly becomes evident after the purchase.
– The Seller of a Motor Vehicle: A seller may file a claim if an auto dealership fails to pay for cars sold to the dealership or through the dealership. This seller may be another car dealer, an individual, a consignor, a regional or national auto auction.
Auto dealers should follow these basic steps when a claim is presented against them.
– Auto dealers need to understand and follow the rules that are set by your state’s department of motor vehicles. It is important to meet all of the terms within the contracts to avoid complications later on.
– Auto dealers should always be honest. They should ask the claimant for proof of their loss.
– All communication should be documented. All correspondence, statements and agreements should have proper documentation.
– Auto dealerships should always be proactive in finding a solution to problems that have arisen before an official surety bond claim.
Look for assistance from the surety bond agency
When a claim is brought to the attention of the surety bond company all of the parties involved in the argument to explain their side of the story. The guarantee that is offered by the surety bond company is that if they don’t find the claim to be legitimate they will not pay. The opposite is true as well, if the evidence is found to be against the dealership the dealer will be obligated to pay the claim up to the bond’s penal sum.
Bonding company’s provide legal defense on your behalf; often leading to a winning verdict on your behalf. It should be understood that if they end up paying the claim due to the dealerships negligence the legal fees plus the amount of the claim will need to be reimbursed.
Protect yourself and your dealership
Claims do arise against auto dealer surety bonds. It is important to protect yourself. Be sure that your dealership follows all industry regulations. If you are honest in your dealings with customers you have nothing to be worried about.
Keep all licenses up to date, renew bonds on time and file all necessary paperwork diligently. If a claim happens to arise you will easily be able to plead the case against the dealership without hurting business.
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