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How much does a $50,000 auto dealer bond cost in Alabama?
The cost of a $50,000 Alabama motor vehicle dealer bond is based on a review of your personal credit report. Qualified applicants can pay as little as $350 for their bonds.
Don’t let poor credit stop you from purchasing your auto surety bond quickly and easily. SuretyBonds.com offers an exclusive bad credit bonding program through which we approve 99% of applicants for the bonds they need. Request your free bond quote now!
Please note this page is for vehicle dealer licensing. Alabama non-dealer designated agents bonds and automotive dismantler and parts recycler bonds are part of separate requirements, which this bond does not apply toward. If you have lost or need to obtain a vehicle title, an Alabama certificate of title bond is required.
Details of an auto bond in Alabama
Auto dealer bonds remain continuous until canceled. To be released and discharged from any and all liability to the state, the surety can file a written cancellation request with the Alabama Department of Revenue. The cancellation becomes effective 60 days after the request is filed.
Why are auto dealer bonds required?
In Alabama, The Department of Revenue’s Motor Vehicle Division requires the following professionals to post $50,000 auto surety bonds:
- new motor vehicle dealers
- used motor vehicle dealers
- designated agents (dealers)
- motor vehicle rebuilders
- motor vehicle reconditioners
- motor vehicle wholesalers
If the principal fails to conduct business according to the letter of the law and the terms of the surety bond contract, the bond protects the state and consumers from resulting financial losses up to the full bond amount. The principal must reimburse the surety for all damages paid.
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What is a motor vehicle dealer bond?
Motor vehicle dealer bonds are a type of consumer protection that ensure principals (auto dealers, motor vehicle rebuilders, reconditioners, and wholesalers) pledge to conduct business in accordance with the law. In Alabama, Sections 32-8-34 and 32-20-22 and Sections 40-12-390 through 40-12-400 of the Code of Alabama 1975 outline the expectations and guidelines for dealers in the state.
To fully understand motor vehicle dealer bonds, review our Auto Dealer Bond Guide.
How to become a motor vehicle dealer in Alabama
To become a licensed motor vehicle dealer in Alabama, applications must be submitted to the department electronically. You can only obtain the forms for the bond and insurance by applying for a dealer license. A $125 licensing fee will be required, with a $5 fee applied for each additional place of business.
In addition to the application and $50,000 auto bond, each dealer must maintain blanket liability insurance coverage for all vehicles owned or associated with the business. Minimum amounts of coverage are:
- $25,000 bodily injury/person/accident
- $50,000 combined bodily injury/accident
- $25,000 property damage/accident or a combined single limit of $75,000/accident
Processing time is seven to 14 business days from when the documents are received by the Department. When your application is approved, you will receive an email instructing you to log in to the system and print your license.
All dealers, with the exception of wholesale dealers, are required to become a designated agent. There are additional licensing requirements for applicants needing to obtain status as a designated agent.