Missouri mandates surety bonds for new and used vehicle dealers

Missouri's House Bill 969, introduced on April 3, 2025, aims to enhance consumer protection in the motor vehicle sales industry by imposing stricter regulations on dealers. The bill addresses significant issues surrounding the licensing and accountability of motor vehicle dealers, including new and used car dealerships, powersport dealers, and boat dealers.

One of the key provisions of House Bill 969 requires all applicants for dealer licenses to submit a corporate surety bond or an irrevocable letter of credit valued at $50,000. This financial safeguard is designed to protect consumers from potential losses due to dealer misconduct, such as failing to deliver vehicle titles within the stipulated timeframe. The bond will serve as an indemnity for any losses incurred by aggrieved parties, ensuring that consumers have recourse in the event of a dealer's failure to comply with legal obligations.

Additionally, the bill mandates that dealers provide proof of a current garage insurance policy as part of their application process. This requirement aims to further secure consumer interests and ensure that dealers are financially responsible for their operations.

Debate surrounding House Bill 969 has highlighted concerns from some industry representatives who argue that the financial burden of the bond may deter new businesses from entering the market. However, proponents of the bill emphasize the importance of consumer protection and the need for accountability in the industry, particularly in light of past incidents where consumers faced difficulties in obtaining vehicle titles after purchases.

The implications of this legislation could be significant for Missouri's automotive market. By establishing stricter licensing requirements, the bill aims to foster a more trustworthy environment for consumers, potentially leading to increased confidence in vehicle purchases. Experts suggest that while the initial costs for dealers may rise, the long-term benefits of consumer trust and reduced fraud could outweigh these concerns.

As House Bill 969 moves through the legislative process, its supporters are hopeful that it will pass and lead to a more secure and reliable automotive marketplace in Missouri. The bill reflects a growing trend among states to prioritize consumer protection in the face of evolving market challenges.