Alabama Motor Vehicle Dealer Bond Overview
- Purpose: To protect the public from fraudulent or negligent acts by vehicle dealers
- Who Needs It: All new, used, motorcycle, trailer and wholesale vehicle dealers in Alabama dealers
- Regulating Body: The Alabama Department of Revenue — Motor Vehicle Division
- Bond Amount: $50,000
- Minimum Price: $350, credit-based
What Is an Alabama Motor Vehicle Dealer Bond?
An Alabama motor vehicle dealer bond is a financial guarantee that you’ll uphold state regulations and operate fairly.
You need to file a $50,000 surety bond with the Alabama Motor Vehicle Division if you’re applying for any of these licenses:
- New vehicle dealer
- Used vehicle dealers
- Motorcycle dealer
- Trailer dealer (excluding trailers not subject to titling)
- Wholesale vehicle dealer
How Much Do Dealer Bonds Cost in Alabama?
The $50,000 Alabama dealer bond starts at $350. Qualified applicants typically pay around 1% of the bond amount.
Your price will depend on your personal credit score. Apply below for a free quote!
SuretyBonds.com offers the lowest available rates from our nationwide provider network with no added fees.
How Does an Alabama Auto Dealer Bond Work?
When you buy an Alabama auto dealer bond, you enter into a three-party contract.
| Bond Party | Description |
|---|---|
| Principal | The vehicle dealer purchasing the bond |
| Obligee | The Alabama Department of Revenue — Motor Vehicle Division requiring the bond |
| Surety | The issuing surety provider |
This bond holds you accountable for complying with Alabama vehicle dealer laws. Violations include:
- Failing to keep the required records
- Violating the terms of a vehicle sales contract
- Misrepresenting a vehicle during sale
- Failing to properly transfer a vehicle title
If you commit any of these acts, harmed parties can file claims against your bond to recover financial losses. You’ll need to reimburse the surety for any paid claims.
How Do I Get a Motor Vehicle Dealer Bond in Alabama?
You can apply for a free quote in just minutes! Fill out the form on this page, and you’ll receive your personalized price within one business day. Once you have your bond, be sure to file it with your license application.
How Fast Can I Get My Bond?
Need your bond fast? We offer overnight, two-day and three-day FedEx shipping. Shipping rates are $20–$40, respectively.
Can I Get Bonded With Bad Credit?
You may still be able to get bonded with bad credit, but it will likely increase your premium rate. Learn more about how credit impacts your cost.
How Do I Renew My Vehicle Dealer Bond?
Alabama vehicle dealer bonds expire annually. We’ll send you reminders by text and email starting 90 days before your renewal date. Simply pay the attached invoice to extend your bond for another year.
How Do I Update My Bond Information?
If you need to update your name or address, email [email protected] with the new information. We’ll issue a bond rider if possible. Be sure to file this form with the Division.
How to Become a Motor Vehicle Dealer in Alabama
In Alabama, if you sell 5 or more vehicles in a year, you’ll need a vehicle dealer license. Follow these steps to become a licensed dealer:
- Purchase a $50,000 surety bond.
- Get blanket liability insurance coverage for all vehicles you own.
- Apply online through the Alabama Partner Registration Portal. Then, you’ll get a list of other documents that need to be physically mailed, including your surety bond form.
- Complete the designated agent application and training (wholesalers are exempt).
- Get a business privilege license from your local county licensing office.
- Request dealer plates through your MyDMV account.
For more detailed information, visit our complete guide to becoming an Alabama auto dealer.
How Much Does It Cost to Open a Car Dealership in Alabama?
You can expect to pay at least $1,497 to get an auto dealer license in Alabama. This includes the following fees:
| Fee | Amount |
|---|---|
| Surety Bond | $350+ annually* |
| License Fee | $125 |
| Each Additional Location | $5 |
| Liability Insurance | $1,000–$3,000+ annually* |
| Dealer Plates | $25 per plate ($17 for motorcycle dealers) |
*Exact insurance and bond costs will vary based on your credit score. You may also need higher insurance coverage if you own a larger dealership.
How Many Dealer Plates Can I Buy?
The number of combined dealer and motorcycle plates you can buy depends on your license and sales volume:
- New dealers: 35 plates
- Used dealers: 10 plates
- High-volume dealers: 25 additional plates if you completed 300 or more title transfers in the past year
