To become a broker in the auto transport industry there are a two things that need to occur in order to be approved. You need a business license through a particular state (for Florida you can register a business at sun biz.org), you need to register through the DOT & FMCSA, and you need to get a Surety Bond. Before 2013 the proper surety bond was set to have $10,000. For companies who couldn’t afford $10,000 up front were able to make payments of $250 (or around that figure) each month and that money would go towards your surety bond. A law was passed and starting in September 2013 that bond was increased to $75,000. The reason for this increase was to make it harder for companies to get into the industry and weeding out the horrible companies who were destroying the industry.
What actually happened was that bond companies found out that they could “front” the bond money, group companies together in a bond and charge an administration fee. This fee was just for the bond company and the money was to never be seen again by the broker. The fee averaged to about $4000 a year, which is about $333 a month if you break it down. That isn’t much more then the previous amount companies were paying for their bond. This change didn’t weeding out any companies and it didn’t help other companies from coming into the industry. All it did was make the companies issuing the bonds richer. At least with the previous $10,000 required bond broker companies were able to get their money back after they canceled their bond or wanted to close their business. Now the broker companies get nothing. What happens when a truck driver has to go after a brokers bond? The bond company will pay the trucker, the amount will then be owed by the broker and they will cancel their bond policy. It is just a load of crap.
Why do our politicians always have their heads in their butts? This new law isn’t helping the auto transport industry at all. All it did was make more money for the bond companies. Broker companies are still able to commit the same scams they were doing before and closing their doors and not having to owe a dime. It’s just a shame.