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Alabama Motor Vehicle Dealer Surety Bond

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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 (ETAPS) 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.

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.

Related Links:

Alabama Department of Revenue - Motor Vehicle Division
Alabama Department of Revenue - Dealer License / Desginated Agent License Application

More Surety Bond Questions?

Check out our FAQ page or What’s a Surety Bond? page. Should you need or choose to buy a surety bond, buy from us. SuretyGroup.com has been underwriting surety bonds throughout the U.S. for more than 35 years. When you work with us, you enjoy the unique benefit of dealing with a team of highly experienced surety agents with in-house underwriting authority. This allows you to receive competitive, low rates, quick approvals, and immediate bond delivery. In most cases, your bond will be delivered within 24 hours after you apply for it.

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