Alabama Motor Vehicle Dealer Bond (Section 40-12-398)

Alabama Auto Dealer Surety Bond

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$50,000 Bond Penalty

Recent legislation has modified the 2014 laws regulating the auto dealer industry. An Alabama Motor Vehicle Dealer Bond in the amount of $50,000 will be required from all dealers and they are required to become "designated agents" for their dealerships. Per Section 40-12-398, each master dealer, new motor vehicle dealer, used motor vehicle dealer, motor vehicle rebuilder, or motor vehicle wholesaler may be issued a license upon delivery to the Department of Revenue dealer division a surety bond executed by the applicant and by a corporate surety company qualified to do business in the state of Alabama.

The Alabama auto dealer bond shall be in a form to be approved by the Commissioner. The surety bond must guarantee compliance with the conditions of all contracts made by the dealer in connection with the sale or exchange of any motor vehicle and not violate any of the laws relating to the conduct of his or her business. The surety bond must run to the Commissioner in favor of any person who may recover any judgment for any loss as a result of the dealer's violation(s) of rule or law. The instrument replaces the bond provided for in subsection (b) of Section 32-8-34 and guarantee performance of all of the responsibilities of 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 bonding regardless of applicant credit and financial condition Do you operate in multiple states? No problem! We offer motor vehicle dealer bonds in all states where they are required by law. 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, call (800) 373-2804, email us at, or click here for a live chat with an underwriter for a Alabama motor vehicle dealer bond application or for information on any surety need.

Surety bond application review and quoting are free of charge. There is no obligation to purchase.

What We Need From You

Additional Attachments

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

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