SURETY SOLUTIONS BLOG

Don't know where to start? Start here: "What Is A Surety Bond?"  

 

How Much Does A Surety Bond Cost?

By Mary Hiers on Jul 13, 2016 5:08:00 PM in

Cost of Surety Bonds

how much does a surety bond cost

Suppose you discover that you need a surety bond to insure a car with a lost title, to do business in your city, or to become a notary public. What is a surety bond, and how much does a surety bond cost? Read on to find out.

 

Short on time? Read about the 12 Influences of Surety Bond Cost. 

What is a Surety Bond?

A surety bond is a three party agreement between a prinicipal, an obligee, and a surety.

  • Principal: the one who needs the bond
  • Obligee: the one who is protected by the bond
  • Surety: the one who issues the bond

The best way to understand a surety bond is that it is insurance for other people, paid by you.

 

Still not sure what a surety bond is? Check out this post.

 

How Much Does a Surety Bond Cost?

There are literally thousands of types of surety bonds, each of which has its own cost structure. The one thing that remains the same for all surety bonds is that you do not need to pay the entire bond amount.

 

 

You will generally pay 1-15% of the total bond amount. Your rate is often based off your personal credit score.

For example, if you need a $10,000 surety bond and you get quoted at a 1% rate, you will pay $100 for your surety bond. 

Higher risk bonds, like construction bonds, may cost 10% or more of the bond's value.

Generally, you only need to pay one time for your bond, until it needs to be renewed. 

Below is a chart that shows how much you might pay for a surety bond based on your credit:

 

surety bond cost

 

How is my Rate Calcuated?

Your surety bond rate is largely dependent on your credit score. But, there are other criteria used in calculating surety bond cost such as:

  • The type of bond - some bonds are riskier than others
  • The amount of the bond - higher bond amounts will cost more than lower bond amounts
  • The risk level of the applicant - your credit score, your financial history, your character, etc

The best way to find out how much you'd pay for a surety bond is to get a free quote.

 

Get A Free Surety Bond Quote

 

The Range of Costs for Surety Bonds

The first thing to understand about surety bond cost is that certain types of bonds are more expensive than others. 

For example, the surety bond cost for a notary public bond is usually quite inexpensive (around $60) while the surety bond cost for an automobile dealer bond can be expensive (anywhere from $1,000-$7,500).

 

The Cost of Lost Title Bonds

The cost of a lost vehicle title bond depends on the value of the vehicle that the applicant is titling. Most states require a lost title bond to be in the amount of 1.5 or 2 times the value of the vehicle you are titling. 

This is just the bond amount. The price you pay is a very small portion of this.

Most people only need to pay $100 for their Lost Title Bond.

Get a free Lost Title Bond quote.

 

The Cost of Performance Bonds

Performance bonds are typically purchased by construction contractors who have won a bid to complete a construction project.

The surety bond cost will depend on the size of the contract and its scope influence. Generally rates range from around 0.5% to 2% of the bond value.

Cities specify how large a performance bond a construction contractor must have for a project of a certain size. A bond for a $100,000 contract will typically cost $500 to $2,000.

Get a free Performance Bond quote.

 

The Cost of Notary Bonds

Notaries have a certain amount of legal authority, and because of this, many states require them to purchase a surety bond as a demonstration that they will perform their duties according to the law and ethical standards.

Surety bond cost is typically low for notary bonds because this is considered a relatively low-risk service. Depending on the size of the bond a notary is required to have, the cost will generally be $50 to $150 per year.

 Please note that Surety Solutions does not offer Notary Bonds at this time. We advise you contact Payne West to secure your Notary Bond instead.

 

Cost of Car Dealer Bonds

Car Dealer Bonds are required before an individual can open a car dealership. Car Dealer Bonds range in amounts. View our Motor Vehicle Dealer Bond Amount PDF to see what your bond amount is.

You will pay anywhere from 1-15% of your bond amount.

Get a free Car Dealer Bond Quote.

 

Pay Less for Your Bond

Getting a bond can be expensive, but it doesn't have to be. At Surety Solutions, our online Bond Cost Calculator lets you view quotes for your bond so you can compare prices before you buy.

We are licensed in all 50 states. Your free bond cost quotes are just a click away.

 

Get Free Surety Bond Quotes

 

Related links:

12 Influences of Surety Bond Cost and How To Get Around Them

Surety Bond Frequently Asked Questions

Types of Surety Bonds [Infographic]