Advance payment bonds are a new requirement in 2008 for vehicle grants. What are advance payment bonds and where can I get one?
An advance payment bond is like an insurance policy that protects you in the event that the manufacturer with whom you contracted to build your vehicle cannot fulfill the contract, i.e., cannot finish building your vehicle for any reason. An advance payment bond is a financial tool used to guarantee that , in the event of manufacturer/contractor default, funds will be available to finish the construction of your vehicle and ensure its proper operation. From the vehicle grantee’s point of view, the insolvency of a contractor during the construction of a vehicle will most likely result in delayed completion of the vehicle, additional expenses for a different manufacturer/contractor to finish the work, or even loss of grant funds. For this reason, we now require manufacturers/contractors to provide a bond from an independent bank, insurance company or bonding agency so that the vehicle grantees can recover damages they may sustain if the manufacturer/contractors default during the constru
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