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Why do designated agents need a bond in Alabama?
The Alabama Department of Revenue’s Motor Vehicle Division requires professional non-dealers to post a $50,000 designated agent bond before conducting business in the state.
These professionals include:
- Licensed financial institutions
- Out-of-state financial institutions (manufactured homes only)
- Law firms (manufactured homes only)
- Title agents (manufactured homes only)
- Towing companies
By posting an Alabama non-dealer designated agent bond, principals (designated agents) pledge to conduct business according to the laws of the state. If the principal conducts unlawful business, the bond protects harmed parties from financial loss up to the full amount of the bond. The principal, in turn, must reimburse the surety for any damages paid out.
Our team of surety bond specialists is dedicated to getting you bonded quickly and for the best price possible. Click here to get started!
How much does a non-dealer designated agent bond cost in Alabama?
The cost of a $50,000 agent bond in Alabama is subject to underwriting, meaning a review of the applicant’s credit is required. SuretyBonds.com can issue this bond for as little as $350 for qualified applicants. Find out what you’ll pay for your designated agent bond and request your free, no-obligation quote now!
If you’re looking for information about surety bonds for motor vehicle dealers in Alabama, click here. Automotive dismantlers and parts recyclers should click here.
Details of Alabama designated agent bonds
Designated agent bonds in Alabama remain in full force and in effect until canceled. The surety can be released and discharged from liability to the state by filing a written request to be released and discharged with the Department of Revenue. The surety is released 60 days after the request is filed.
How to become a designated agent in Alabama
To become a registered designated agent in Alabama, applicants must meet license-based qualification requirements, submit an application and bond (if needed), and complete a free training class.
License-based qualification requirements:
- Licensed financial institutions: Submit a copy of Title 5, Chapter 19, State Banking License or the equivalent
- Pawn shops: Submit a copy of Alabama Pawn Shop License
- Out-of-state financial institutions (manufactured homes only): Submit a copy of company’s State business or regulatory license
- Law firms (manufactured homes only): Submit a copy of document evidencing that a principal of the firm is admitted to the State Bar
- Title agents (manufactured homes only): Submit a copy of certificate of authority issued by the Alabama Department of Insurance
If the above requirements are met, designated agents must then complete and submit the relevant application form for Dealers or Non-Dealers to the Department of Revenue Motor Vehicle Division at P.O. Box 327640, Montgomery, AL 36132-7640. Once a completed package is received and reviewed, the designated agent account will be set up in ALTS, the Alabama Title System, and a designated agent certificate will be sent to the applicant.
Training Course and ALTS Account Activation
All designated agents are required to attend a free course conducted by the department before their ALTS account is activated and they are allowed to process title applications through ALTS. Upon class completion, the ALTS account will be activated within three to five business days.
The following information is needed at the training session:
- Designated agent number (provided on the Designated Agent Certificate)
- Designated Agent Title Seminar & ALTS Training Manual
- Sales/Rental Tax Number
- Financial institution account number
- Financial institution routing number
- Financial institution account type (checking/savings)
- Account classification (commercial/consumer)
Take the first step toward becoming a designated agent in Alabama by getting your quote on your non-dealer agent bond!
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