Alabama Motor Vehicle Dealer Surety Bond

Alabama Motor Vehicle Dealers need to have a surety bond before they can receive their dealer license. The State of Alabama Department of Revenue, Motor Vehicle Division, known as the "Department," is responsible for the licensing of new and used motor vehicle dealers (also known as car dealers or auto dealers), and motorcycle dealers. Manufacturers and dealers of travel or house trailer dealers, utility trailer dealers, mobile home dealers, semi trailer dealers, trailer coach dealers. As well as, motor vehicle wholesalers.

The Code of Alabama 1975, Sections 40-12-390, defines the new motor vehicle dealer license requirements. Any person or corporation in the business of selling a motor vehicle is required to first obtain a license, a state sales tax number and a surety bond. The surety bond ensures compliance of state laws and faithful performance of duties.

Surety Bond Requirements:

A $25,000 surety bond is required for licensure. Surety bond form MV 539-BN will need to be uploaded as an attachment to the license application.

The license and surety bond renews October 1 of each year.

Motor Vehicle Dealer License Requirements:

1. Complete the online application Alabama Online Dealer License Application and pay the license fee and dealer plate fees.
2. Submit a copy of all owners, partners, members, officers and directors drivers licenses or non-driver identification cards.
3. Obtain blanket liability insurance coverage with minimum limits of $25,000 bodily injury/person/accident, $50,000 combined bodily injury/accident and $25,000 property damage/accident or, a combined single limit of $75,000 per accident and attach the completed Insurance Certification Form MVD-1.
4. Submit a picture of the signage and lot (new and used dealers).
5. Upon issuance of the dealer license, dealer must go to their county licensing office to obtain a privilege license.

How Much Will This Bond Cost?

The premium that you pay for an Alabama Motor Vehicle Dealer Surety Bond is dependent on credit and experience in the industry. Our rates start at $250 with good credit. Contact our Surety Bond Agents for a free quote.

Did You Know?

Upon completion of entering a new dealer license application in the Alabama MVTRIP portal, you must print out the transmittal sheet and mail it to the Department along with any supporting documents.

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