One of the hardest hit segments of the economy during the great recession was the automobile industry. Many auto dealers did not make it and many caused surety bond losses on the way out of business. These losses resulted in many surety bond companies exiting the auto dealer bond market and those that remained, doubled or even tripled the rate. California was one of the hardest hit markets in the country and car dealers in California had to adsorb much higher surety bond premiums on top of a bad economy.
The economy has been steadily improving, or at the very least it has stopped getting worse. The surety marketplace has responded to this improved economic outlook for automobile dealers in California. Now, very qualified California auto dealers can get the $50,000 surety bond required by the California DMV, at a rate as low as 1%. Very Qualified means the dealer has been in business for at least five years, has maintained exceptional credit and owns real estate. Those dealers that do not qualify for Surety1 Select will still have options available with the same great service and competitive rates. During the last few years of economic turmoil, it can be argued that other than real estate, no other industry was negatively impacted as much as the auto industry. Finally, thee are surety bond markets available that will reward those auto dealers that made it through the crisis without compromising credit worthiness with a super low rate.
As the economy continues to improve and the loss ratio for California Auto Dealer Bonds decreases, it should become easier to qualify for this lower rate.