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Why do Alabama auto dismantlers and parts recyclers need a bond?
The Severance and License Section of the Alabama Department of Revenue’s Business and License Tax Division requires automotive dismantlers and parts recyclers to post a $50,000 surety bond when obtaining a license.
By posting an Alabama automotive dismantler and parts recycler surety bond, principals (dismantlers and recyclers) pledge to conduct business ethically and lawfully. If the principal fails to do so, the bond protects harmed parties from financial loss up to the full amount of the bond. The principal must reimburse the surety for all damages paid.
How much does a $50,000 automotive dismantler and parts recycler bond cost in Alabama?
Alabama automotive dismantler and parts recycler bonds cost as little as $350. The amount an applicant will pay is based on a review of his or her personal financial history. Click Apply Now to complete an online application and receive your free, no-obligation quote.
Terms of an Alabama automotive dismantler and parts recycler bond
Automotive dismantler and parts recycler bonds in Alabama remain effective until canceled. The surety can cancel the bond and be released from all liability by filing a written request with the Department of Revenue at least 60 days prior to the cancellation’s effective date.
The bond form will be rejected unless all of the following information is included:
- City, county, and state in which the business is located
- Name and address of the surety company providing coverage
- Issuance date of the bond
- Telephone number of the agent
How to become an automotive dismantler or parts recycler in Alabama
In Alabama, dismantlers and recyclers are defined as any person possessing 10 or more inoperable motor vehicles for more than 30 days. Every person, firm, or corporation desiring to engage in the business of an automotive dismantler and parts recycler must have a license to operate.
To receive a license, applicants must submit an application electronically through the Motor Vehicle Regulatory License Portal. Along with a completed form, applicants are required to:
- Pay the required fees.
The application fee is $225, and payment must be made online with a credit card.
- Have a $50,000 surety bond on file with the Dealer License Section.
This must include a Power of Attorney.
If the bond is not on file with the Dealer License Section, the signed bond and Power of Attorney must be submitted with the dismantler license transmittal document.
The bond form will be available when the electronic application has been completed.
Title 40-12-412 of the Code of Alabama further defines the automotive dismantler’s and parts recycler’s license requirements.
The license year runs from October 1 through September 30, and licenses must be renewed by October 31 of each year. Licenses renewed after September 30 will be subject to a 15% penalty. After October 31, a 15% penalty and applicable interest will be charged (Section 40-12-415, Code of Alabama 1975).