Alabama Motor Vehicle Dealer Bond

Before Alabama licenses you as a car dealer, you post a $50,000 motor vehicle dealer bond. File it with the Alabama Department of Revenue. It is a standard license step.

Bond Amount
$50,000
Typical Premium
$300–$2,500/yr
Term
1 Year
Required By
Alabama Department of Revenue, Motor Vehicle Division
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What Is the Alabama Motor Vehicle Dealer Bond?

Think of the Alabama motor vehicle dealer bond as a promise to your buyers and the state. Wrong a customer, and they can claim against the bond. The surety collects from you after.

In Alabama, the bond is $50,000.

Who Needs This Bond in Alabama?

How to Get Bonded — Step by Step

  1. Apply for the bond on this page. Approval is quick for most dealers.
  2. Finish your Alabama license paperwork.
  3. File the bond with the Alabama Department of Revenue.
  4. Get licensed and open for business.

Renewal & Continuous Bond Coverage

Plan to renew your Alabama dealer bond every year. Line it up before the deadline so your license never drops.

Frequently Asked Questions

Does the Alabama bond protect me?

No. The bond protects your customers and the state, not you. If a claim is paid, you repay the surety. The bond is not your own insurance.

How fast can I get bonded in Alabama?

We shop several sureties for you, often within a day. Many bonds are issued the same day for good credit.

How much does the bond cost?

You pay a yearly premium — a small percent of the bond amount. Your rate depends mostly on your credit.

How a Surety Bond Works

A dealer bond is a type of surety bond. The picture below shows the three parties and what happens if someone files a claim.

Diagram of how a surety bond works: the obligee requires the bond, the principal applies and signs an indemnity agreement, and the surety issues the bond; if the principal fails, the obligee files a claim, the surety investigates and may pay, and the principal reimburses the surety.

Ready to get your Alabama Motor Vehicle Dealer Bond?

Apply in 2 minutes. Most quotes returned same day.

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Related: All Alabama surety bonds · What is a surety bond? · How surety bond costs are calculated

Underwriting Disclosure. All surety bond applications are subject to underwriting review and approval by the issuing surety company. Quoted premiums are estimates only; final pricing is determined by individual underwriting factors, which may include personal and business credit history, financial statements, industry experience, and claims history. Many bonds qualify for instant online approval, while others may require additional documentation, financial review, or indemnitor signatures prior to issuance. SuretyBondly makes no representation, warranty, or guarantee of approval, eligibility, premium amount, bond form, or issuance timing. Bond amounts, forms, and requirements are governed by the applicable obligee and statutory authority and may change without notice. Information provided on this page is for general informational purposes only and does not constitute legal, financial, or tax advice.