What is an Alabama Car Dealer Surety Bond?
An Alabama Car Dealer Surety Bond is required by Title 40, Chapter 12, Article 8, Code of Alabama 1975. These new and used car dealer bonds are a form of consumer protection similar to motor vehicle dealer bonds required by other states. The bond seeks to provide financial protection for consumers who have been harmed by the car dealer. This harm can be caused by failure to abide by the sales contract entered into with the car buyer or a violation of the state statutes which govern the motor vehicle sales industry. Failure to transfer title to the car buyer and fraudulent dealings are most often the cause of car dealer bond claims.
Who needs an Alabama Car Dealer Surety Bond?
New car dealers, used car dealers, rebuilders, and car wholesalers all require car dealer bonds in Alabama. The surety bonds are a requirement in order to obtain your car dealer’s license within the state. Please visit our How to Get an Alabama Car Dealer License page to learn more about getting your dealer license today.
How much is an Alabama Motor Vehicle Dealer Bond?
Alabama Motor Vehicle Dealer bonds vary in price depending on the amount of bond needed and your personal credit score. A listing of surety bond types by license and premium are below:
- $25,000 New Car Dealer Bond – $250 and up per year
- $25,000 Used Car Dealer Bond – $250 and up per year
- $10,000 All Other AL Car Bonds – $100 and up per year
However, the new and used car dealer surety bonds have a mandatory expiration date of September 30th of each year. This means your bond premium can be prorated to save you money if the bond is placed after October 1st. A prorated premium is a reduction in the amount you pay for your bond based on when the bond is issued. Please use our online Alabama Dealer Bond application for a free, no obligation quote.
Can I get a Bad Credit Alabama Motor Vehicle Dealer Bond?
Yes, you can obtain a motor vehicle dealer bond even if you have bad credit. Your premium amount will be higher than the amounts listed above and you can expect to pay anywhere between 3% and 10% of the bond amount needed. For example: If you have bad credit and purchase a $10,000 surety bond, your cost would range from $300 to $1000 annually.
How fast can I get my New or Used Car Dealer Surety Bond?
In most cases, the same day we receive your signed agreement and payment of premium. The surety company who agrees to write your bond will require a signed agreement on a document known as an indemnity agreement. You can learn more about indemnity agreements by visiting our What is an Indemnity Agreement page. An emailed copy of your bond can be sent once we receive a scanned copy of your indemnity agreement or, in some cases your E-Signed agreement, and payment of your surety bond premium. The original surety bond along with the required power of attorney is then mailed directly to your address and can be overnighted for your convenience.
How do I apply for an Alabama Car Dealer Surety Bond?
- Complete our online Alabama Car Dealer Surety Bond application, or
- Download and complete our printable Alabama Car Dealer Surety Bond application, and
- Receive your surety bond quote in minutes!
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