Arizona Auto Dealer Bond

Arizona Auto Dealer Bond

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.

Save now with Jet! It only takes about 2 minutes to get your quote online.



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

Claim your honest dealer savings with Jet by completing the above application.

What Dealer Bond Do I Need and What Does It Cost?

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.

Bond TermCost
Monthly$68
1 Year$675
2 Years$1,181
Arizona $100,000 Dealer Bond Cost

Wholesalers and Brokers

A $25,000 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. The $25,000 surety bond acts a prerequisite to obtaining a license.

The price of the $25,000 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.

Bond TermCost
Monthly$15
1 Year$150
2 Years$263
Arizona $25,000 Wholesale Dealer Bond Cost

Automotive Recyclers

Individuals and business that obtain a least 6 motor vehicles per year for the sole purpose of dismantling them and selling their parts are required to obtain an Automotive Recycler License and purchase and maintain a $20,000 surety bond.

Below are Jet's lowest rates for the $20,000 Arizona Automotive Recycler Dealer Bond.

Bond TermCost
Monthly$12
1 Year$120
2 Years$210
Arizona $20,000 Automotive Recycler Bond Cost

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. 

Arizona Auto Dealer Bond

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.

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What Is the Purpose of the Auto Dealer Bond?

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:

  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 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.

How Does the Application Process Work With Jet? 

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.

GET A QUOTE

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.

Can Jet File the Auto Dealer Bond for Me?

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

Can I Cancel the Arizona Motor Vehicle Dealer Bond and Get a Refund?

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.

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 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.

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 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.

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 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.

Arizona Motor Vehicle Dealer Bond Form Example

Arizona 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: