Motor vehicle dealers are required to post a Motor Vehicle Dealer Bond as part of the process to license the dealership. The amount of the bond depends on what type of vehicles are to be sold, the amount of vehicles you plan to sell, and other factors. Read our Car Dealer License Guide to learn more about how to get your dealership licensed and bonded.
A used car dealer must file a $10,000 surety bond and a new car dealer must file a $25,000 surety bond.
The price for the bond, also known as the bond premium, is only a small fraction of the bond amount.
This bond guarantees the principal will abide by all Alabama state laws and regulations outlined in Sections 40-12-390 through 40-12-400 along with Sections 32-8-34 and 30-20-22 of the Code of Alabama 1975.
Since this bond is continuous, it remains in full force and effect until it is cancelled. If this bond is to be cancelled, it will be cancelled 60 days after the request for cancellation is filed. The cancellation request must be filed with the Alabama Department of Revenue.
The applicant should verify the bond amount with the obligee before applying for the bond to ensure the bond amount is correct.
Surety1 is not directly involved with the licensing process, but we’ve compiled this information which may helpful for you.
State licensing fees and requirements:
All licensing fees are required by the obligee, not the surety company.
For additional licensing information, visit Alabama’s official page: AL Department of Revenue Motor Vehicle Division