(a) The bond shall have a corporate surety licensed to do business within this state. A letter of credit shall be an irrevocable letter of credit issued by an insured institution, as defined in ORS 706.008. The surety or institution shall notify the Department of Transportation if the bond or letter of credit is canceled for any reason. The surety or institution shall continue to be liable under the bond or letter of credit until the department receives the notice required by this paragraph, or until the cancellation date specified in the notice, whichever is later.

(b) The bond or letter of credit shall be executed to the State of Oregon.

(c) Except as otherwise provided in this paragraph, the bond or letter of credit shall be in the following sum:

(A) If the person holds a certificate to be a dealer exclusively in motorcycles, mopeds, Class I all-terrain vehicles or snowmobiles or any combination of those vehicles, the bond or letter of credit shall be for $10,000.

(B) Except as provided in subparagraph (A) of this paragraph, if the applicant is seeking a certificate to be a vehicle dealer, the bond or letter of credit shall be for $50,000 for each year the certificate is valid.

(d) The bond or letter of credit described in this subsection shall be approved as to form by the Attorney General.

(e) The bond or letter of credit must be conditioned that the person issued the certificate shall conduct business as a vehicle dealer without fraud or fraudulent representation and without violating any provisions of the vehicle code relating to vehicle registration, vehicle permits, the transfer or alteration of vehicles or the regulation of vehicle dealers.

(f) The bond or letter of credit must be filed and held in the office of the department.

(g) The vehicle dealer shall purchase a bond or letter of credit under this subsection annually on or before each anniversary of the issuance of the vehicle dealer’s certificate.

(2) Any person shall have a right of action against a vehicle dealer, against the surety on the vehicle dealer’s bond and against the letter of credit in the person’s own name if the person suffers any loss or damage by reason of the vehicle dealer’s fraud, fraudulent representations or violations of provisions of the vehicle code relating to:

(a) Vehicle registration;

(b) Vehicle permits;

(c) The transfer or alteration of vehicles; or

(d) The regulation of vehicle dealers.

(3) Notwithstanding subsection (2) of this section, the maximum amount available under a bond or letter of credit described in subsection (1)(c)(B) of this section for the payment of claims to persons other than retail customers of the dealer is $10,000.

(4) Notwithstanding subsection (2) of this section, a person other than a retail customer of the vehicle dealer may not make a claim under subsection (2) of this section against the surety on the vehicle dealer’s bond, or against the vehicle dealer’s letter of credit, if the vehicle dealer holds a vehicle dealer certificate to deal exclusively in motorcycles, mopeds, Class I all-terrain vehicles or snowmobiles or any combination of those vehicles.

(5) If the certificate of a vehicle dealer is not renewed or is voluntarily or involuntarily canceled, the sureties on the bond and the issuer of the letter of credit are relieved from liability that accrues after the department cancels the certificate. [1983 c.338 §794; 1985 c.16 §392; 1985 c.598 §6; 1987 c.261 §7; 1989 c.434 §2; 1991 c.331 §145; 1997 c.631 §556; 1999 c.593 §§2,5; 2001 c.141 §§2,3,4,5; 2017 c.530 §1]