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Alabama Motor Vehicle Dealer Bond

Price Varies / 1 year term

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How much does the Alabama auto dealer bond cost?

Alabama auto dealer bond costs start at $350 for the state-required 1-year term. Your exact premium will be provided after a quick application review based on the license type you need. Apply now to get your free, personal auto dealer surety bond quote!

How do you get an Alabama vehicle dealer bond?

You can apply for your free Alabama motor vehicle dealer bond quote online 24/7. You'll need to provide the following information for Department of Revenue approval.

  • dealer or dealership name
  • physical business address
  • county
  • license type
  • dealer license number, if available

Once your order has been processed, you'll receive a copy of your bond by email, and your official vehicle dealer bond will be shipped to your preferred mailing address.

How fast can you get a motor vehicle surety bond?

Our industry-leading technology and responsive customer service team allow us to offer free quotes and deliver official Alabama motor vehicle surety bonds faster than any other surety provider. The DOR requires your official Alabama auto dealer bond be physically issued and shipped to you, so choose overnight shipping during checkout if you're in a rush. Orders placed by 4 PM CST Monday-Friday are typically shipped same-day.

If you have questions about the Alabama vehicle industry bond requirement or your application, call 1 (800) 308-4358 to speak with a friendly surety expert. We're here to guide you through the motor vehicle bond process so you can get back to running your business.

Bond Type
$50,000Motor Vehicle Dealer Bond

What is an Alabama motor vehicle dealer bond?

Code of Alabama 1975 requires all new and used motor vehicle, motorcycle, trailer, and wholesale dealers and rebuilders to file a $50,000 surety bond before being licensed to work in the state. The bond obligates licensed dealers to follow all applicable Code of Alabama legal provisions that regulate their business and also comply with any contract regarding the sale or exchange of a vehicle. The bond protects consumers and the state against losses, damages, and expenses resulting from a dealer's wrongdoing.

Why is the Alabama motor vehicle surety bond required?

By filing a motor vehicle surety bond, an individual agrees to operate their business and fulfill all professional obligations as required by law. If they fail to do so, any harmed party can file a claim to recover losses resulting from dealer noncompliance. The issuing surety company will pay valid claims up to the full $50,000 bond amount, which the bonded dealer must then reimburse.

The Alabama motor vehicle surety bond is required for business license registration. If you're trying to register a vehicle with a missing title, a separate Alabama certificate of title bond is required. We also offer more detailed information about the specific Alabama automotive dismantler and parts recycler bond requirement. 

Who needs an Alabama motor vehicle surety bond?

Bond Form MVT 4-3 is titled the “Motor Vehicle Surety Bond” but is more commonly known as an “auto dealer bond” or “MVD bond.” The form covers the following license types as required by the Code of Alabama.

  • new motor vehicle dealer
  • used motor vehicle dealer
  • motor vehicle rebuilder
  • motor vehicle wholesaler
  • master dealer
  • boat dealer
  • designated agent
  • title service provider
  • automotive dismantler and parts recycler
  • motor vehicle wholesale auction
  • manufacturer

Who are the parties involved in an Alabama auto dealer bond?

As the “obligee,” the Alabama Department of Revenue Motor Vehicle Division requires the bond to enforce motor vehicle industry license requirements. As the “principal,” a dealer purchases and files the bond as a guarantee they'll operate their business according to state law. As the “surety,” the insurance company backs the principal's guarantee to fulfill their professional obligations.  

What is the motor vehicle industry license bond amount?

The Code of Alabama requires a $50,000 surety bond to be filed by individuals applying for any motor vehicle industry license. The Alabama Department of Revenue Motor Vehicle Division increased the bond amount from $25,000 to $50,000 effective September 1st, 2020.

How do I update or change my auto dealer bond form?

If the Department of Revenue Motor Vehicle Division requires your surety bond documentation to be updated for any reason, contact your surety provider. If you purchased your bond from SuretyBonds.com, email [email protected] to explain the needed change.

The most common changes for these bonds include:

  • dealer or dealership name
  • physical business address
  • county
  • license type

How do you renew your Alabama auto dealer bond?

Your Alabama auto dealer bond must be renewed before its current 1-year term expires. Once you pay your SuretyBonds.com renewal invoice, renewal instructions will be emailed to you to keep your bond active for your next license term. 

How do I get an Alabama motor vehicle license?

Applications for motor vehicle dealer licenses must be submitted through the state's Motor Vehicle Division License Portal. After submitting your application, you will receive transmittal documents. 

The following are additional new dealer requirements. 

  • $50,000 dealer surety bond (upload to the portal)
  • proof of liability insurance (upload to the portal)
  • proof of power for business location
  • documents that establish a permanent location 
  • photos of the business location (building, sign, hours of operation, vehicle lot)
  • designated agent application
  • sales tax number
  • FEIN number (not required for sole proprietorships)
  • zoning letter (if the building is in a residential area) 

You will receive an email with further instructions after your license is approved. 

Call 1 (800) 308-4358 to talk with a Surety Expert