Alabama Motor Vehicle Dealer Bond

The Alabama Motor Vehicle Dealer bond is a  type of surety bond required by the Department of Revenue’s Motor Vehicle Division. The bond amount is $50,000 and the cost of the surety bond is usually between 1% and 3% of the bond amount. Surety1 will shop its many markets to procure the right price at the right terms.

How to Get an Alabama Motor Vehicle Dealer Bond

At Surety1.com we make it easy to obtain this surety bond. Our simple, three step process is:

1. Complete the easy to navigate and secure online application. ¹
2. Review the free, no obligation quote from one of Surety1’s professional surety bond agents, usually within one business day.
3. Sign some paperwork and pay the bond premium

Once these steps have been completed, the Alabama Motor Vehicle Dealer Bond will be shipped to the bond principal (applicant).
^{1-The name of the applicant on the surety bond application must match exactly the full legal business name of applicant for the license.} 

Surety1.com is a service of AssuredPartners one of the largest and fastest growing insurance agencies in the nation. Representing over a dozen surety bond companies, Surety1.com is the premier online provider of surety bonds nationwide since 2003.

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Who needs the surety bond?

Any person, firm or corporation that conducts business as a motor vehicle dealer must be licensed with the state. The Motor Vehicle Dealer bond is one of the licensing requirements. Motorcycle, trailer, wholesale dealers and rebuilders must be licensed as well. In addition, new and used dealers are  required to become designated agents with the Motor Vehicle Department. The motor vehicle dealer bond satisfies this bonding requirement as well.

• The bond amount is $50,000.
• Licenses are effective October 1 to September 30.
• Licensees  have a 30-day grace period to renew their license.
• A 15% penalty will be incurred for licenses not renewed prior to November 1st.
• There must be a permanent location, with signage, and sufficient space to display motor vehicles for sale.

Read our Car Dealer License Guide to learn more about how to get your dealership licensed and bonded.

Alabama Motor Vehicle Dealer License Requirements

To become a licensed used car dealer in Alabama, you must meet the following requirements:

• Be at least 21 years old
• Be a citizen or permanent resident of the United States
• Have a good moral character
• Have a permanent business location in Alabama
• Obtain a Alabama Motor Vehicle Dealer Bond
• Obtain a business license from your county’s probate office
• Obtain a regulatory license from the Alabama Department of Revenue (ADOR)

To obtain a regulatory license from the ADOR, you must submit an application and supporting documentation, including:

• A copy of your business license
• A copy of your surety bond
• Proof of liability insurance
• Proof of financial responsibility
• A completed background check

The application fee for a used car dealer license is $100.

Once you have submitted all required documentation and paid the application fee, the ADOR will review your application. If your application is approved, you will be issued a dealer license.
^{The information provided above is for general informational purposes only and does not constitute legal advice.  Do not rely solely on the information presented here as a substitute for professional legal counsel.}