Alabama Auto Dealer Bond

Alabama Auto Dealer Bond

Auto dealers in Alabama are required by the Motor Vehicle Division of the Department of Revenue to hold a $50,000 Motor Vehicle Surety Bond. Jet provides the bond as a guarantee to the state and the public that recompense is available should a dealer's fraudulent or negligent actions lead to financial damage. New vehicle dealers, used vehicle dealers, rebuilders, and wholesalers must secure the Auto Dealer Bond to receive and maintain the new Master Dealer License.

Claim your savings with Jet by completing the below application.



Jet studies the car business to sniff out the shady shops that cause all of the claims, allowing us to lower bond prices for Alabama dealers.

Other bond providers just run a generic credit check, which opens the floodgates causing quality dealers to unfairly subsidize the deadbeats with an inflated premium.

We think honest dealers with solid business practices should get to save on their bond.

We also provide dealers direct access to surety underwriters and claims handlers without any agents or brokers in the middle. Eliminating the middleman dramatically simplifies the bond purchase and filing process with the lowest rates, no down payment, a no-obligation monthly payment option, and the best defense should anyone ever make a claim on your bond.

Why did the Bond Amount Increase?

Recent legislation increased the bond amount from $25,000 to $50,000 to allow a larger reimbursement amount for those harmed by a dealer’s actions. Curbstoning, or “curbing”, is one of those actions which occurs when a dealer acts as a private seller to illegally rid of malfunctioning vehicles. In the past, the financial damage caused by curbing often surpassed the full bond amount of $25,000, therefore the bond limit was increased to allow for greater restitution.

What's the Lowest Price for the Alabama Auto Dealer Bond?

$20 monthly or $200 for one year. The price of the bond is determined by a soft credit check of the owner and their experience as a licensed dealer. Refer to the chart below which shows different pricing for preferred credit rates.

Bond TermCost
Monthly$20
1 Year$200
2 Years$350
3 Years$500
Alabama Motor Vehicle Surety Bond Pricing

Jet provides affordable pricing options for everyone. Our monthly payment plan allows you to pay only a small portion of the bond premium each month, especially with a larger bonding amount required.

Alabama Auto Dealer Bond

Who Is Required to Hold the Alabama Motor Vehicle Surety Bond?

Motor vehicle dealers, designated agents, auto dismantlers and parts recyclers, wholesale auctions, manufacturers, boat dealers, and title service providers need a $50,000 surety bond to be licensed with the Alabama Department of Revenue. Designated agents that are licensed dealers can satisfy both requirements by holding one Motor Vehicle Surety Bond.

What Is the Purpose of the Auto Dealer Bond?

Motor Vehicle Dealer Bonds act as a guarantee that financial harm caused by the dealer’s actions can be resolved with limited to no damage to the public. The Motor Vehicle Division of the Department of Revenue is tasked with preventing fraud related to transportation businesses in Alabama. The bond is essential in the Motor Vehicle Division’s goal by supplying reimbursement for those who have incurred losses due to a dealer’s actions, such as selling a vehicle without a title or failing to pay taxes to the Department of Revenue.

How Does the Application Process Work With Jet?

It’s simple! Jet’s application is a step-by-step process that only asks for basic information and can be completed in just minutes. Provide your business information and social security number for the soft credit check. Once the application is complete, Jet will provide you with a rate that will be available for immediate online purchase. You will receive an electronic copy for your records.

How Does the Bond Get Filed to the Alabama Department of Revenue?

After you provide payment, Jet signs and seals the bond and files the original with the Department of Revenue. Prior to sending it in, it’s important to make sure the correct information is on the bond form, especially for new dealer applicants. Below is what is required on the bond form for various business types:

Entity TypeInformationExample
IndividualApplicant's name and business nameJan Smith, DBA Jan’s Cars
PartnershipNames of partners & partnership nameJan Smith & Andy Brown, DBA J&A Autos
Limited Liability Company (LLC)Legal name of businessJan’s Cars, LLC
CorporationCorporation NameJan’s Cars, Inc.
Alabama Auto Dealer Bond Form Information

Businesses must have signatures from the individual applicant, all LLC members, all partners, or a corporate officer. All required documentation should be sent to the following address:

Alabama Department of Revenue
Motor Vehicle Division
P.O. Box 327643
Montgomery, AL 36132-7643

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Can I Cancel My Bond and Get a Refund?

Yes! Jet allows you to cancel the bond at any time. Just send us a request via mail or email. Jet must then provide the Department of Revenue with a 60-day written cancellation notice. After the 60-day period, a refund will be calculated for bonds purchased on annual terms. If that’s the case, Jet will evaluate how much time is remaining on the bond and refund you any unused premium. For those paying on a monthly basis, the payments will stop after the 60-day period.

Jet can request cancellation with the Department of Revenue for non-payment of the bond. Remember, without a bond you are unable to be licensed as an auto dealer in Alabama.

How to Renew the Alabama Auto Dealer Bond in Alabama

Motor Vehicle Dealer Bonds are continuous until cancelled, meaning as long as you make payment the bond will stay active. Jet offers the bond in monthly installments in addition to one-, two-, and three-year term options.

If you choose monthly payments, there is no renewal needed! The payments will continue to come out of your preferred account until cancellation is requested.

If you pay for the bond in full at the time of purchase, Jet will send out a renewal notice via mail and email prior to the bond’s renewal date. No additional paperwork is needed, just provide payment and Jet takes care of the rest!

How Does a Principal Avoid Bond Claims?

Auto dealers must comply with Alabama House Bill 393, which updated multiple details and regulations of the Code of Alabama 1975.

Dealer’s customers and the Department of Revenue can bring a complaint against the dealership for improper licensing practices. Dealers should avoid prohibited acts by operating in an honest and thorough manner. Actions that could lead to penalties include, but are not limited to:

Failure to abide by the laws put in place by the Department of Revenue can result in the dealer receiving a Class A misdemeanor and various civil fines. It is in the best interest of the dealership owner(s) to appropriately reimburse any harmed parties prior to them pursuing a claim on the bond. The Department of Revenue can file a claim after an investigation and the public can file a claim on the bond after receiving final judgment from a court.

The Alabama Department of Revenue has jurisdiction to revoke or suspend the master dealer license at any time if the dealer does not comply with regulations and refuses to pay penalties inflicted upon them.

What Happens if I Get a Bond Claim?

Upon a claim being filed by the Department of Revenue, Jet has 30 days to conduct an investigation. The Department of Revenue provides us with all supporting documentation and Jet will request that the dealership provide any documentation they have regarding the case. Jet works to protect its customers from faulty claims, which is why additional documentation may be requested during the investigation. It is important for the motor vehicle dealer to be responsive during this process.

If Jet finds a claim legitimate, we will provide payment to the claimant for the claim amount, up to the full bond limit. It is then the dealer’s responsibility to reimburse Jet. The bond acts as an extension of credit and the dealer is ultimately liable for their original actions. By paying back a claim right away Jet is able to restore the bond and the dealership may continue business practices. Failure to pay the Surety (Jet) back can result in difficulties obtaining the surety bond and license needed to operate a dealership in Alabama.

Alabama Auto Dealer Bond Form

Notary Bond Application:

X

Business Information:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Employee Dishonesty Bond Application:

Business Information:

Business Description:

Coverage Requirements:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Contract Bond Application:

X

Business Information:

Owner Information:

Job Details:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Worker's Compensation Application:

X

Business Information:

Business Description:

Coverage Requirements

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information: