Florida HSMV Form 86020 – Motor Vehicle Dealer Surety Bond

What Is Florida HSMV Form 86020?

Form HSMV 86020 is the official surety bond document prescribed by the Florida Department of Highway Safety and Motor Vehicles for motor vehicle dealers. It is not the license application itself (that is Form HSMV 86056). Instead, Form 86020 is the bond instrument that must accompany the license application or renewal.

The form creates a three-party agreement between:

• The Principal – the motor vehicle dealer or dealership
• The Surety – a surety company authorized to do business in Florida
• The Obligee – the Florida Department of Highway Safety and Motor Vehicles (and, by extension, consumers harmed by dealer violations)

According to the official form (Rev. 08/11), the bond guarantees that the dealer will comply with written contracts related to the sale or exchange of motor vehicles and will not violate Chapters 319 and 320 of the Florida Statutes.

Legal Authority: Florida Statute Section 320.27

Florida Statute § 320.27(10) requires every motor vehicle dealer applicant to deliver a good and sufficient surety bond (or irrevocable letter of credit) in the amount of $25,000 before any license is issued. The statute states that the bond must be conditioned so the dealer:

• Complies with the conditions of any written contract made in connection with the sale or exchange of any motor vehicle
• Does not violate any provisions of Chapter 319 or Chapter 320 in the conduct of the licensed business

The bond runs in favor of any person in a retail or wholesale transaction who suffers a loss due to such violations. The aggregate liability of the surety in any one year is limited to the $25,000 penal sum.

Who Needs Form HSMV 86020?

Virtually all licensed motor vehicle dealers in Florida must file Form 86020. This includes the following license classes:

• VF – Franchise (new vehicle) dealers
• VI – Independent (used vehicle) dealers
• VW – Wholesale dealers
• VA – Auction dealers
• SD – Salvage dealers

Anyone who buys, sells, offers for sale, or displays three or more motor vehicles in a 12-month period is generally considered a dealer and must obtain a license and the corresponding bond. Each licensed location typically requires its own $25,000 bond.

Note: Mobile home dealers use Form HSMV 86018 and recreational vehicle dealers use Form HSMV 86019. These are separate forms with different requirements.

Bond Amount and Cost

The required bond amount is fixed at $25,000 for all motor vehicle dealer classes under Form 86020. Unlike some states that scale the bond based on sales volume, Florida uses a flat amount.

You do not pay the full $25,000. Instead, you pay an annual premium to a surety company. Premiums commonly range from approximately 1% to 5% (or higher for applicants with weaker credit), typically resulting in costs between $250 and $1,250 or more per year depending on personal and business credit, financial strength, and underwriting guidelines.

An irrevocable letter of credit for the same $25,000 amount (using Form HSMV 86057) is an acceptable alternative to the surety bond.

Key Requirements for Completing Form 86020

The bond must be issued on the exact language of the official FLHSMV form or contain the precise wording required by the state. Key elements that must appear include:

• Exact legal business name and any fictitious names (DBA) as registered with the Florida Division of Corporations
• Bond number
• $25,000 penal sum
• Effective date and term (aligned with the license period)
• Signature of the principal (dealer or authorized officer)
• Signature of the surety’s attorney-in-fact
• Surety company name, address, telephone number, and official seal or stamp
• Surety agent contact information

The form must be free of erasures, white-outs, or alterations. Original bonds are required; photocopies are generally not accepted for initial filing.

How to Obtain and File Form HSMV 86020?

1. Contact a licensed surety bond producer authorized to write bonds in Florida.
2. Complete the surety’s application (usually includes business details and a credit check).
3. Pay the premium once approved. Most bonds can be issued within 24–48 hours.
4. The surety issues the completed Form 86020 (or a continuation certificate for renewals).
5. Submit the original bond together with your dealer license application (Form HSMV 86056) or renewal (Form HSMV 86720) to the appropriate FLHSMV Motorist Services Regional Office, along with all other required documents and fees.

You can download the official blank form directly from the FLHSMV website:

Download Florida HSMV Form 86020 (PDF)

Bond Term and Renewal Cycles

The bond must cover the full license period and be renewed annually (or with a continuation certificate). Typical expiration dates are:

• Independent, Wholesale, Auction, and Salvage dealers (VI, VW, VA, SD): May 1 – April 30
• Franchise dealers (VF): January 1 – December 31

A new bond or proper continuation certificate must be delivered to FLHSMV at the beginning of each license period. Failure to maintain continuous coverage can result in license suspension or revocation.

What the Bond Protects Against?

Form 86020 protects consumers and the state from financial losses caused by dealer misconduct, including but not limited to:

• Failure to deliver titles
• Misrepresentation of vehicle history or condition
• Failure to honor written contracts related to vehicle sales or exchanges
• Violations of Florida’s motor vehicle dealer laws (Chapters 319 and 320)

If a valid claim is paid by the surety, the dealer (principal) is obligated to reimburse the surety company.

Additional Licensing Requirements Related to the Bond

Filing Form 86020 is only one piece of the Florida motor vehicle dealer licensing process. Applicants must also typically provide:

• Completed Form HSMV 86056 (or renewal Form HSMV 86720)
• Proof of garage liability insurance (minimum $25,000 combined single limit + $10,000 PIP in most cases)
• Proof of established place of business meeting facility standards under Florida Administrative Code 15C-7.003
• Pre-licensing dealer training certificate from an FLHSMV-approved school
• Federal Employer Identification Number (FEIN) and Florida sales tax number
• Business registration with the Florida Division of Corporations
• Electronic fingerprints for officers
• Applicable fees ($300 initial application for most motor vehicle dealer licenses)

For the most current requirements and regional office locations, always refer to the official FLHSMV dealer licensing page.

Frequently Asked Questions

Is Form 86020 the same as the dealer license application?
No. Form 86020 is the surety bond. The license application is Form HSMV 86056.

Can I use a different bond form?
No. Florida requires the exact language of Form HSMV 86020 (or an approved equivalent continuation). Modified language is typically rejected.

What happens if my bond is canceled?
The surety may cancel with 30 days’ written notice to FLHSMV. You must replace the bond promptly or risk license action.

Is an irrevocable letter of credit accepted?
Yes. Form HSMV 86057 may be used in place of the surety bond for the same $25,000 amount.

Conclusion

Florida HSMV Form 86020 is a critical compliance document for anyone seeking or maintaining a motor vehicle dealer license in the state. By posting the required $25,000 surety bond on the official form, dealers demonstrate financial responsibility and protect consumers under Florida Statute § 320.27. Always obtain the bond from a reputable surety authorized in Florida, ensure the form is completed accurately, and file the original with FLHSMV as part of your licensing package.