Why Would A Surety Bond Be Required For A Motorcycle Purchase?

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Why would you need a surety bond while buying a motorcycle?

A surety bond for a motorbike purchase or an M-2 title bond may be required for a variety of reasons. The most important reason is that it is required by law.

According to Maryland Car Law, “Any vehicle sold by a […] dealer must first receive one of the following: A title certificate; an M-1, M-2, or M-3 form; or a manufacturer’s or importer’s certificate in the case of a new motorcycle.” This essentially states that if you buy a used motorcycle in Maryland (unless it already has an MSO), your dealer must give you a surety bond before releasing the bike to you. They are breaching the law if they do not issue one.

A second reason you might need a surety bond for a motorcycle purchase is if your bank or lender requires it. If you ask for a loan on any type of car or piece of equipment, your lender will almost certainly require some sort of financial guarantee that the item in question has not been stolen or used as collateral on another loan.

A third reason you might need a surety bond for a motorcycle purchase is that the dealer will ask you to provide one. This is something that varies per dealer, but some do require this form of surety bond before allowing a customer to walk away with their new bike.

What is the purpose of surety bonds?

In situations like this, surety bonds are essential as a measure of protection for both the dealer and their client. If it is discovered that the bike was stolen or was used as part of another person’s loan application, the buyer’s payments will be reimbursed by the surety bond provider. In the event of theft or fraud, both the dealer and the buyer will be protected.

Surety bonds are also essential since they serve as confirmation that the motorcycle has been correctly titled before being delivered to the new owner. When you buy a motorcycle, it must be registered with your local government, usually the Secretary of State’s office (or equivalent). Depending on where you live, this process can take anywhere from 7 to 15 days.

After this time period has passed without incident, the dealership will be able to issue an M-2 title bond, which serves as documentation that the car has been legally transferred into your name. Before they can issue one of these papers, the dealership will need a copy of your original MSO as well as your out-of-state registration (so be sure to keep it with you when you go to purchase your new bike).

What are the advantages of a surety bond?

When purchasing a used motorcycle, a surety bond benefits both the dealer and the consumer. The dealer receives some sort of insurance in the event that the police, your bank, or another lending institution discovers that it is stolen and they are unable to lawfully transfer ownership (remember, the dealership would be punished). The buyer also benefits since they have peace of mind knowing that if something goes wrong along the road, the surety bond provider would return their money.

After all, you just spent a lot of money on a new bike, and you don’t want to lose it if something goes wrong with it after you’ve gone with it. A surety bond adds an extra layer of safety to your transaction and ensures that both you and the dealer are happy.

Is it possible to get a return on a surety bond?

Yes, if you purchase a surety bond and decide to return it within the first 15 days, you will receive a full refund. The surety bond provider sets this time limit, and there is no way to get around it. If you buy a used motorcycle and decide within 5 days that you don’t want it, the dealership will refund your surety bond and return your motorcycle.

However, after the 15-day period has gone, you won’t be able to claim a return on your surety bond. This doesn’t mean they won’t take the bike back; it just means that instead of giving you a check for every dollar you put down on the bike, they’ll give you an M-2 form with your name filled in the spot where “seller” used to be.

If any deductions were made from this M-2, they are listed underneath the section headed “explanation of deductions.” Unlike refunds, which are processed immediately once the fifteen days have gone, most dealers will give out M2 forms within 30 days of purchase.

Is it possible to get your money back if you purchase a surety bond?

Yes, the entire sum. This is because surety bonds are refundable for up to 15 days after purchase, whilst most other types of insurance only cover your bike for the first 30 days. If something were to happen within those 30 days, no insurance would cover it, and the dealership would be responsible for the loss. By including a surety bond with your purchase, you ensure that if anything goes wrong during the first 30-days, you will be compensated for the money you spent on your new motorcycle.

What if I don’t purchase a surety bond?

If you don’t secure a surety bond before buying a secondhand motorcycle, you won’t be able to get your money back if something goes wrong, even if it’s only for the first 15 days. This puts you in danger of losing all of your money if there is a mistake with the title or registration information that isn’t detected until later.

A surety bond adds an extra layer of protection for both the buyer and the seller, ensuring that everyone involved in the transaction is paid on time if something goes wrong. It’s well worth the money to add one to your motorbike purchase so you don’t have to be concerned about what might happen after you leave the showroom with your shiny new bike!

To know more, check out Executive Surety Bonds now!

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