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Alabama Motor Vehicle Dealer Surety Bond (Act 539)

Alabama Auto Dealer Surety Bond

$25,000 Bond Penalty

On March 5th, 2014, the State Legislature delivered a new dealer law to the Governor for signature which brings uniformity to the licensing procedure. An Alabama Motor Vehicle Dealer Bond in the amount of $25,000 will be required from ALL dealers upon ratification. This is a significant change for those dealers in used cars only that before passage of the statute were required only to offer a $10,000 surety bond. Pursuant to the new law §40-12-398, before any license shall be issued to a new motor vehicle dealer, used motor vehicle dealer, motor vehicle rebuilder, or motor vehicle wholesaler, the applicant shall deliver to the Commissioner a good and sufficient surety bond, executed by the applicant as principal and by a corporate surety company qualified to do business in the state as surety in the sum of twenty-five thousand dollars ($25,000).

Such surety bond shall be in a form to be approved by the Commissioner, and shall be conditioned that the motor vehicle dealer, motor vehicle rebuilder, or motor vehicle wholesaler shall comply with the conditions of any contract made by such dealer in connection with the sale or exchange of any motor vehicle and shall not violate any of the provisions of law relating to the conduct of the business for which he is licensed. The dealer bond shall be payable to the Commissioner and to his successors in office, and shall be in favor of any person who shall recover any judgment for any loss as a result of any violation of the conditions contained. The motor vehicle dealer bond shall serve in lieu of the bond provided for in subsection (b) of Section 32-8-34 and, in addition to all other conditions, shall also be conditioned upon their performance of their duties as a designated agent under Chapter 8 of Title 32. Submission of the Alabama motor vehicle dealer bond and license materials should be directed to the Commissioner at:

Alabama Department of Revenue
Motor Vehicle Dealer Surety Bonds
50 North Ripley Street
Montgomery, AL 36104
Telephone Information Line: (334) 242-1170

Alabama surety leader, Surety One, Inc. is available for same-day servicing of your new or renewal dealer bond request. Our special programs allow us to offer you bonding regardless of your credit and financial condition Even if you have been given a renewal quote you can get another from us IMMEDIATELY. Do you operate in multiple states? No problem! We offer motor vehicle dealer bonds in all states where they are required by law. View our Nationwide Motor Vehicle Dealer Bond Guide. We also offer certificate of title bonds and lien release bonds which are sometimes needed in the course of your dealership operations. Visit us at SuretyOne.com, call (787) 333-0222 or (800) 373-2804, or email us at Underwriting@SuretyOne.com for a Alabama motor vehicle dealer bond application or for information on any surety need.

What We Need From You

Additional Attachments

  • If bond is greater than $50,000, provide a current business financial statement.

Additional Resources

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