Arizona Auto Dealer Bond

Arizona Auto Dealer Bond

Motor vehicle dealers operating in the State of Arizona are required by the Arizona Department of Transportation (ADOT) to provide an Auto Dealer Bond to receive a license for selling cars. Dealers must post an additional and separate bond for each of the counties in which they operate. Jet Insurance Company provides the Arizona Auto Dealer Bond to protect consumers from fiscal damages that may arise when a dealer sells a vehicle but fails to provide clear title certificates or does not pay title, registration, or other fees and taxes.


Jet has the monthly payment option that no other surety carrier or their agents or brokers can offer. Avoid substantial premium amounts and better use your capital investing in your business. 

What Auto Dealer Bond Do I Need and What Does it Cost?

New and/or Used Motor Vehicle Dealers

A $100,000 Auto Dealer Bond is required for any licensed new or used vehicle dealer in Arizona. Dealers in Arizona are defined as any person who sells seven or more vehicles in a 12-month period. Public consignment auction dealers are also required to carry the $100,000 bonding limit.

The $100,000 motor vehicle dealer bond cost at Jet starts at $68 per month or $675 annually. The bond rate is based on the personal credit of the dealership owner. Below illustrates Jet’s preferred tier bond costs.

Bond TermCost
1 Year$675
2 Years$1,181
Arizona $100,000 Motor Vehicle Public Auction Dealer Bond Cost

Wholesalers and Brokers

A $20,000 Wholesale Auto Dealer Bond is required for any licensed wholesale dealer, broker or wholesale auction dealer. A wholesale only operation can sell vehicles to licensed auto 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.

With Jet the cost for the $20,000 bond starts at $15 monthly or $150 annually. Costs may vary based on the personal credit of the dealership or brokerage owner. Below is the preferred tier bond costs at Jet.

Bond TermCost
1 Year$150
2 Years$263
Arizona $25,000 Broker, Auction, & Wholesale Dealer Bond Cost

Jet is the only surety carrier in the market who offers the Auto Dealer Bond in monthly installments, giving you a straightforward monthly payment with no extra fees or interest. Other carriers often send you to a premium finance company who will likely require a down payment and charge interest and fees (sometimes up to 30% APR!). Your bond is in effect as long as you keep paying your monthly payment, and you can cancel at any time. It doesn’t get much simpler than that!

Arizona Auto Dealer License Process

The below graphic shows the general process for getting your motor vehicle dealer license with the Arizona Department of Transportation.


What Is the Purpose of the Auto Dealer Bond?

The Arizona Auto Dealer Bond is required as part of the auto dealer licensing process put into play by the Arizona State Legislature in Arizona Revised Statutes Section 28-4361. The bond serves as a means to protect consumers and the ADOT from damages resulting from a dealer who commits either of the following:

  1. Does not pay the appropriate title, registration, or other taxes or fees on the vehicles they sell
  2. Fails to deliver a “clean title” to a car buyer, meaning a title certificate that is free and clear of any previous owner’s interest or liens (unless liens are accepted in writing by the buyer)

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 us, Jet (as the financially responsible third party) provides a guarantee to ADOT 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.

How Does the Application Process Work With Jet? 

When you apply for your bond with Jet, we will only ask for the basic business information needed to produce your quote. 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 only take a second and will not affect the credit score.

Once you complete the application, you will receive a quote with a link to purchase the bond right away. After purchase, you will receive an emailed receipt and 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.


Can Jet File the Auto Dealer Bond for Me?

Jet absolutely can! 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

Can I Cancel the Auto Dealer Bond and Get a Refund?

With Jet, you can! If you elect to cancel your bond, you will need to notify Jet in writing. We will notify ADOT of your intent to cancel, which will begin the 60-day period in which ADOT is required to hold the bond until cancellation is final, per the AZ Revised Statute Section 28-4362. During this 60-day period, the obligation to ADOT still stands and 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.

How to Renew the Auto Dealer Bond

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 ADOT 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.

How Does a Motor Vehicle Dealer Avoid Bond Claims?

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:

  1. Pay all necessary taxes or title, registration or other fees
  2. Provide buyers with a valid title certificate, free of any other liens or owners’ interests

How a dealer runs their business can effectively neutralize any issue with the Arizona Department of Transportation. Ensuring the dealership obtains 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 ADOT, the Department 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 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 does not receive proper restitution, then a claim may be made against the bond.

What Happens if I Get a Bond Claim?

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 ADOT 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 ADOT, but the dealer is still responsible for their actions that resulted in the claim. As such, the dealer is required to reimburse Jet for any payments made on their behalf.

Arizona Auto Dealer Bond Form