Florida HSMV Form 86057 – Dealer Letter of Credit Guide – Aspiring and licensed motor vehicle dealers in Florida must provide financial security to protect consumers. One accepted option is the Florida HSMV Form 86057, the official Irrevocable Letter of Credit for Motor Vehicle Dealers. This form allows dealers to meet the $25,000 security requirement under Florida law as an alternative to a traditional surety bond.
This comprehensive guide covers everything U.S. dealers need to know about Form HSMV 86057, including legal requirements, how to complete it, submission details, and key differences from the surety bond option.
What Is Florida HSMV Form 86057?
Florida HSMV Form 86057 is the official document used by the Florida Department of Highway Safety and Motor Vehicles (FLHSMV) for an irrevocable letter of credit issued by a bank authorized to do business in Florida. It serves as financial protection for any person involved in a retail or wholesale motor vehicle transaction who suffers a loss due to the dealer’s failure to comply with written contracts or violations of Chapters 319 or 320 of the Florida Statutes.
The form is specifically titled “Irrevocable Letter of Credit – Motor Vehicle Dealer” and was last revised in August 2011 (HSMV 86057 Rev. 08/11). It is issued by a Florida-authorized bank at the request of the dealer (the “Principal”) in favor of the FLHSMV.
You can download the official form directly from the FLHSMV website: Download Florida HSMV Form 86057 PDF.
Legal Requirement Under Florida Law
Florida Statutes § 320.27(10) mandates that every applicant for a motor vehicle dealer license must deliver a surety bond or irrevocable letter of credit in the amount of $25,000 before a license can be issued. This requirement applies to independent (VI), wholesale (VW), auction (VA), salvage (SD), and franchised motor vehicle dealers.
Key statutory points include:
- The letter of credit must be issued by a bank authorized to do business in Florida.
- It protects any person in a retail or wholesale transaction who suffers a loss from the dealer’s failure to comply with written contracts or violations of Chapters 319 or 320, Florida Statutes.
- Aggregate liability of the issuing bank is limited to $25,000 in any one year.
- A new letter of credit or continuation certificate must be submitted at the beginning of each license period.
- Licensees must notify the department within 10 calendar days of any renewal, continuation, change, or new issuance.
Official forms and resources are available on the FLHSMV Forms and Resources page.
Who Needs Form HSMV 86057?
Any individual or business applying for or renewing a Florida motor vehicle dealer license may use Form 86057 in place of the surety bond (Form HSMV 86020). This includes:
- Independent used car dealers
- Wholesale dealers
- Motor vehicle auctions
- Salvage dealers
- Franchised (new vehicle) dealers
Mobile home dealers use a separate form (HSMV 86058), and recreational vehicle dealers typically use the surety bond route (HSMV 86019).
Key Requirements for the Irrevocable Letter of Credit
To be accepted by the FLHSMV, the letter of credit must meet specific criteria:
- Amount: Exactly $25,000
- Issuing Bank: Must be authorized to do business in the State of Florida
- Letter of Credit Number: Assigned by the bank
- Exact Business Name: Must match the name under which the dealership is applying, including any fictitious (DBA) names registered with the Florida Division of Corporations
- Effective Dates: Must align with the dealer license period
- Signatures: Original signature of the bank officer and the principal/owner of the dealership
- Bank Seal: Official bank seal (or rubber stamp if no seal exists)
- Contact Information: Full bank name, address, and telephone number
A new irrevocable letter of credit or continuation certificate is required at the start of each license renewal period.
How to Complete Florida HSMV Form 86057?
The form is relatively straightforward and requires information from both the dealer and the issuing bank:
- Bank name and confirmation that it is authorized to do business in Florida
- Principal (dealer) name
- Irrevocable Letter of Credit number assigned by the bank
- Effective date and license term ending date
- Name of dealership
- Signature of the principal (dealer/owner)
- Typed or printed name of the principal
- Dealership address (street, city, state, ZIP)
- Signature of bank officer and title
- Bank name, address, and telephone number
- Bank seal
The completed original form must be submitted with the dealer license application (typically Form HSMV 86056 for new licenses or HSMV 86720 for renewals).
Letter of Credit vs. Surety Bond: Which Should You Choose?
Florida allows either a $25,000 surety bond (Form HSMV 86020) or the irrevocable letter of credit (Form HSMV 86057).
Surety Bond Advantages:
- Lower out-of-pocket cost (typically $250–$750 per year depending on credit)
- Does not tie up $25,000 in cash or credit line
- Easier for most dealers to obtain
Irrevocable Letter of Credit Advantages:
- No annual premium payments to a surety company
- Useful for dealers with strong banking relationships and available collateral
Disadvantages of the Letter of Credit:
- Requires the bank to set aside or collateralize the full $25,000
- Can impact the dealer’s available credit or cash flow
Most dealers choose the surety bond because it is significantly less expensive in terms of capital commitment.
How to Submit Form HSMV 86057?
Submit the original completed Form 86057 along with your dealer license application package to the appropriate FLHSMV regional office or the Bureau of Dealer Services. Supporting documents typically include:
- Completed application (HSMV 86056 or renewal form)
- Proof of garage liability insurance
- Business registration documents from sunbiz.org
- Dealer training course certificate (for new applicants)
- Fingerprint results
- Lease or ownership proof for the business location
- Applicable fees
For the most current submission instructions and regional office locations, visit the official FLHSMV Dealer Licensing page.
Renewal and Continuation Requirements
The letter of credit is issued for a specific license period. At the start of each new license year (or biennial period if applicable), dealers must submit either a new Form 86057 or a continuation certificate from the bank. Failure to maintain continuous coverage can result in license suspension or revocation.
Independent, wholesale, auction, and salvage dealers generally renew on a cycle ending April 30. Franchise dealers often follow a calendar-year cycle.
Common Mistakes to Avoid
- Using a bank not authorized to do business in Florida
- Mismatching the exact legal and DBA names on the letter of credit with the license application
- Submitting a photocopy instead of the original
- Missing the bank seal or required signatures
- Failing to align effective dates with the license period
- Not notifying FLHSMV of changes within the required 10-day window
Where to Get Help and Official Resources?
Always rely on official FLHSMV sources for the latest requirements:
- Official Form Download: https://www.flhsmv.gov/pdf/forms/86057.pdf
- FLHSMV Forms and Resources: Dealer Forms Page
- Florida Statutes § 320.27: Available through the official Online Sunshine website or legislative resources
- Florida Division of Corporations (Sunbiz) for business name registration
Contact your local FLHSMV regional office or a licensed Florida surety bond producer if you need assistance determining whether the letter of credit or surety bond is the better option for your situation.
Conclusion
Florida HSMV Form 86057 provides a legitimate alternative to the motor vehicle dealer surety bond, allowing dealers to meet the mandatory $25,000 financial security requirement through an irrevocable letter of credit issued by a Florida-authorized bank. While it offers flexibility, most dealers find the surety bond more cost-effective because it does not require locking up significant capital.
Always download the current official form from the FLHSMV website, ensure all information matches your license application exactly, and submit the original document with your complete application package. Staying compliant with Florida Statutes § 320.27 protects both your dealership and Florida consumers.