Motor vehicle dealers operating in Arizona are required to file a surety bond with the Arizona Department of Transportation to be licensed. The bond protects the public from financial damages that may arise from a dealer failing to deliver services according to state regulations.
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Dealers must post an additional and separate bond for each of the counties in which they operate.
New and/or Used Motor Vehicle Dealers
A $100,000 bond is required for any licensed new or used vehicle dealer in Arizona. Dealers are defined as any person who sells 7+ vehicles in a year. Public consignment auction dealers are also required to hold a $100,000 bond.
For this bond, Jet's rates start at $68 per month or $675 annually. The quote you receive is based on the personal credit of the dealership owner. Below illustrates Jet’s preferred tier bond costs.
Wholesalers and Brokers
A $20,000 bond is required for any licensed wholesale dealer, broker, or wholesale auction dealer. A wholesale-only operation can sell vehicles to licensed motor vehicle dealers. Brokers can only collect fees or commissions to assist in the sale of vehicles. Wholesalers and brokers who sell vehicles directly to consumers must be properly licensed to do so, which is not encompassed by the $20,000 surety bond requirement.
The price of the $20,000 bond starts at $15 monthly or $150 annually. Costs vary based on the personal credit of the dealership or brokerage owner. Below are the preferred tier bond costs at Jet.
Jet has a monthly payment option, which no other surety carrier can offer. Avoid substantial premium amounts and better use your capital to invest in your business.
The below graphic shows the general process for getting your motor vehicle dealer license with the Arizona Department of Transportation.
The surety bond is required as part of the dealer licensing process put into play by the State Legislature in Arizona Revised Statutes Section 28-4361. The bond serves as a means to protect consumers and the Department of Transportation from damages resulting from a dealer who commits either of the following:
Imagine your customer drives off the lot with their newly purchased car off the lot, but then finds out that they owe hundreds or thousands of dollars in overdue registration fees. Or, imagine buying a car only to find out it still belongs (on paper) to someone else! The consumer is coming after the dealer in either case and with good reason.
When you purchase your bond with Jet (the financially responsible third party), we provide a guarantee to the Arizona Department of Transportation that customers who purchase from you will be recompensed if you engage in the illicit activities listed above and fail to rectify the fiscal injury your dealership caused.
When you apply for your bond, we will only ask for the basic business information needed to produce your quote and fill out the bond form. We streamlined the application process to be efficient so you can get your bond within minutes. Jet will need the social security number of the dealership owner to run a soft credit check. It will not affect the credit score.
Once you complete the necessary information, a quote will be displayed on the screen for monthly, annual, and multi-year terms. Select the option that works best for you and put in your credit card payment. After purchase, you will be able to download a copy of the bond for your records.
Remember that if you operate locations in multiple counties in Arizona, you will need to file separate bonds for each county.
Yes! Once you have purchased your Auto Dealer Bond, Jet will file the original bond form, signed and sealed, along with power of attorney to ADOT Motor Vehicle Division for you. A receipt and a copy of your bond will be emailed to you.
If you would rather deliver the bond to ADOT yourself, you can opt to do so during checkout. The original bond and any other license requirements can be mailed to the following address:
Arizona Department of Transportation
Motor Vehicle Division
Dealer Licensing Unit
P.O. Box 2100, MD 552M
Phoenix, AZ 85001
It's a definite possibility. If you elect to cancel your bond, you will need to notify Jet via email at [email protected]. We will notify the Department of Transportation of your intent to cancel, which will begin the 60-day period in which your bond is held, per the AZ Revised Statute Section 28-4362. During this 60-day period, you and Jet are still responsible for any claims.
Dealers who have paid for an annual term for the bond may receive a prorated refund, based on the time remaining. Jet will calculate the unearned premium (beyond the 60 days noted above), and the remainder will be refunded to you. Monthly payments subscribers will continue to be charged the monthly rate during this time, until cancellation is complete, at which point, payments will cease.
For dealers who have opted to pay for the bond monthly, renewal is not necessary. As long as your payments continue, the bond will remain in force with the Department of Transportation without any effort.
For those paying for the bond annually, simply pay the renewal premium before the renewal date of your bond. Jet will remind you of the renewal well in advance so you can either renew online or through the mail.
Auto dealers in Arizona can avoid claims against their license bond by selling vehicles in accordance with the Arizona Revised Statutes Section 28-4361. According to the statute, this specifically means that auto dealers must:
How a dealer runs their business can effectively neutralize any issue with the Arizona Department of Transportation. Ensuring the dealership obtains a clean title before selling a car is a no-brainer step. Keeping good records and utilizing an efficient process.... why not? Paying government taxes and fees—that is about as unavoidable as the only other guarantee in life so might as well.
If a consumer files a complaint with the Department of Transportation, they will launch an investigation and ask you for any applicable records and evidence to come to your defense. Best to provide all evidence and be compliant with the regulator's demands should there be any mitigation measures taken. If a consumer truly sustains financial damages as a result of an auto dealer’s negligence or malevolence and does not receive proper restitution, then a claim may be made against the bond.
If you receive a claim against your bond, please notify Jet immediately. We will guide you through the process. If the claim is coming through the Department of Transportation following their own investigation, there may be little Jet can do, however, we will do our diligence and perforate any bureaucratic obtuseness to get the claim dropped.
If the claim is found valid, Jet is obligated to compensate the injured party up to the full limit of the bond. As the financial guarantor, Jet Insurance Company acts as a line of credit for the auto dealer, payable to the Department of Transportation, but the dealer is still responsible for the actions that resulted in the claim. As such, the dealer is required to reimburse Jet for any payments made on their behalf.