Automobile Salvage Recyclers in the State of Indiana need to obtain a license from the state and an Indiana Auto Salvage Recycler Bond (Vehicle Merchandising Bond).
Who Needs to Be Licensed and Bonded?
Automobile Salvage Recycler
Indiana Code 9-32-2-10 defines an Auto Salvage Recycler as, “a) except as provided in subsection (b), means a person that:
(1) acquires damaged, inoperative, discarded, abandoned, or salvage vehicles, or their remains, as stock-in-trade;
(2) dismantles, shreds, compacts, crushes, or otherwise processes such vehicles or remains for the reclamation and sale of reusable components and parts;
(3) disposes of recyclable materials to a scrap metal processor or other appropriate facility; or
(4) performs any combination of these actions.
For purposes of this title, a recycling facility, a used parts dealer, and an automotive salvage rebuilder are all considered as an automotive salvage recycler.
(b) “Automotive salvage recycler”, for purposes of IC 9-32, does not include a person that holds a valid automobile auction license under IC 9-32 unless the person is a recycling facility, a used parts dealer, or an automotive salvage rebuilder.
Automobile Salvage Rebuilder
An Automobile Salvage rebuilder as, “a person that:
(1) acquires salvage vehicles for the purpose of restoring, reconstructing, or rebuilding the vehicles; and
(2) resells, offers to resell, or advertises for resale the vehicles for use on the highway.
For the purposes of the Indiana License Code and bonding requirement, these two classifications are the same.
There are many license requirements to becoming an Automobile Salvage Recycler Company in Indiana. You can read more about those requirements here.
Who Are the Parties to an Indiana Vehicle Merchandising Bond for Salvage Recyclers?
These surety bonds are a three-party guarantee. The Auto Salvage Recycler is the Principal on the bond. The Obligee is the party requiring the bond and who gets the direct benefit of the guarantee. On this bond, the Obligee is The Indiana Secretary of State Auto Vehicle Services Division. The Surety is the bond company who is guaranteeing the obligation of the bond.
What Does the Indiana Auto Salvage Recycler Bond Guarantee?
The surety bond guarantees that the Auto Salvage Recycler will comply with all laws, ordinances and resolutions that govern the issuance of the License issued by the Indiana Secretary of State. You can read more about these responsibilities here. A person may file a claim against the Auto Salvage Recycler for violating the provisions. The State requires that notice be given, an opportunity for a hearing and an opportunity for judicial review. The bond secures damages for a person who is affected by a violation of the Salvage Recycler after a judgement has been issued. The bond also helps secure payment of fines, penalties, costs, and fees assessed by the Secretary of State.
Amount of the Indiana Auto Salvage Recycler Bond
The State of Indiana requires that Automobile Salvage Recycler maintain a surety bond in the amount of $25,000.
How to Obtain an Indiana Auto Salvage Recycler Bond?
These bonds are very easy to obtain and can be purchased instantly below by most Auto Salvage Recyclers. Most surety bond companies do require a credit check for these bonds. MG Surety works with 25+ bond companies and can help Salvagers of all circumstances. We even have options for those with credit challenges.
What is the Cost of an Indiana Auto Salvage Recycler Bond?
Many surety bond companies charge 1% or $250 per year for these bonds. We do work with bonds companies with even better pricing, but you must call and qualify for preferred pricing.
Length of the Bond
The Indiana Vehicle Merchandising Bond is continuous for as long as the Auto Salvage Recycler is licensed. That means the bond will need to be renewed each year. That also means that the bond premium will be due each year that the bond is in force.
Cancellation of the Bond
The Surety may cancel the bond by giving thirty days written notice to the Obligee and the Principal. The notice of termination does not become effective until the Secretary of State receives the notice at their office which is currently:
302 West Washington Street
Indianapolis, IN 46204
The Surety is still liable for actions violations committed while the bond was in existence and during the thirty-day notice period. If the Surety cancels the bond for any reason, the Salvage Recycler will need to secure a replacement bond from another surety bond company or risk having their license suspended.
Indemnity is Required
Like most surety bonds, Indiana Vehicle Merchandising Bonds require indemnity. These bonds are not insurance and the surety bond company will seek reimbursement from the Auto Salvage Recycler and any other indemnitors if they must pay a valid loss. You can read more about indemnity here. Claims against the bonds should be avoided.
Indiana Vehicle Merchandising Bonds are required by the State. Fortunately, these surety bonds are easily obtainable for most Automobile Salvage Recyclers and can be purchased instantly. Auto Salvagers may also need other Indiana Surety Bonds. Many of those can also be purchased directly here. Contact MG Surety Bonds anytime with questions. Our surety bonds experts are standing by to help. You can also visit our FAQ Page for Surety Bonds and our Blog for educational surety bond topics.