For the 170 motor vehicle recyclers and dismantlers established in Arizona, there is a $20,000 Auto Recycler Bond requirement. The bond is a guarantee from Jet Insurance Company to the State of Arizona Department of Transportation (ADOT) that should the recycler fail in the transferring of title or payment of fees, Jet will provide compensation to the injured party.
With Jet, you can expect the lowest prices instantly online. We cut out middlemen brokers and agents offering the bond directly to you, our customer.
With Jet, you can purchase the Auto Recycler Bond starting at $16 a month or $160 annually. Below you can see our preferred price tier for several various term options.
The bond cost is based on the owner of the dismantling service’s personal credit score. The Jet team wastes no time on getting you the rate quickly; it is all online through our streamlined application.
Unclear vehicle ownership can create a mystery worthy of Sherlock Holmes’ attention. Should the auto recycler start to dismantle the vehicle, while another party makes a claim of ownership and does not want the vehicle dismantled, then an issue has arisen and damages can be claimed. The vehicle recycler can either have clearance from the ADOT, or will have to rectify the claim for the damages. If the dismantler refuses to fix the problem, then the surety bond guarantees the surety company (Jet) will provide compensation.
The Arizona State Legislature put the bonding requirement into law as a tool to protect the public from damages created surrounding the dismantling of vehicles. While the bond is a last resort, it does provide Arizona legislators the warm fuzzy that they are protecting the public, and with money paid from a neutral third party (Jet) rather than from government coffers. The ADOT enforces the law and is tasked with the management of the motor vehicle recycler licensing and bonding.
The application and purchase of the bond is done online or over the phone in moments. Jet does need the owner of the dismantler business to apply with their social security number, so we can perform a quick credit check. It is a soft check, takes a moment, and will not affect your credit score.
The bond will be available to purchase online with options to pay for it monthly or on an annual term of your choosing. Following the purchase, you will receive a copy of the bond and receipt.
Jet will supply the completed bond to the Arizona Department of Transportation Motor Vehicle Division Licensing Unit for you. We are not slowed down by forwarding the bond to you, just to have you send the bond form to the ADOT. Jet will always send you a bond copy though for your records.
However, upon your request we will send you the signed and sealed bond form. For example, you are applying for a new recycler license and want to send the bond form with the application documents. Just let us know during checkout and we will get the bond to you. The bond form needs to be sent to the following address:
State of Arizona Department of Transportation
Motor Vehicle Division Dealer Licensing Unit
Mail Stop MD 552M
PO Box 2100
Phoenix, AZ 85001-2100
With Jet, this is possible. Just email us at [email protected] or mail us your request to cancel your bond. Jet will file the notice of the bond cancellation to the ADOT.
The ADOT does not cancel that bond immediately upon receipt of the notice. The bond remains active for another 60 days.
Jet does have to factor that period of time into our refund amount as the bond is still active, and will send back any prorated amount left to you. For monthly paying customers, we will still need to take out the potential last two payments as the bond is active during this period of time.
With Jet, you don’t if you get on our monthly payment plan. The bond stays active so long as payments continue to come through to us.
For our annual paying customers, whether they purchased 1, 2, or 3 year terms, Jet will send you a renewal notice well prior to the bond’s expiration date. Simply provide Jet payment and you are done.
The bond is continuous until actively cancelled by Jet, meaning, so long as Jet receives premium for the bond it will stay active.
Chapter 7, Article 3, 28-2094 of the Arizona Revised Statutes is the best place to reference the regulations surrounding an auto recycler that can get them into trouble in regards to the surety bond requirement. Prior to dismantling a vehicle, the auto recycler must obtain a dismantle certificate from the ADOT. This will require proof of vehicle title, registration card and license plate. There is a $4 fee we should mention, but that can’t even buy a good burger now-a-days. Having all the proper paperwork is one thing, but a clean title is just as important. The auto recycler must make sure the vehicle is free of any liens.
The dismantler must report to the ADOT if the registration card or license plate cannot be obtained. Under penalty of perjury, they can still get the dismantle certificate and begin work on the vehicle.
Just don’t start cranking on that car just yet. The ADOT requires 3 days from the delivering of all documentation (5 days if mailed in) before dismantling can begin. The ADOT wants a couple of days to see if a lien or ownership dispute comes through before the car comes apart.
If you dismantle the vehicle and someone can make a claim to it, then you have just destroyed their property. If the ADOT is notified, completes an investigation, and you cannot present viable proof of ownership transfer, then you will have to reimburse the injured party (or re-‘mantle’ that vehicle quickly).
The Auto Recycler Bond will cover mispaid fees to the ADOT, but this in no means is a way to have fees paid for. Not paying licensing fees or damaging the public, as described above, to the point where the surety bond is tapped for payment is a one way ticket to a suspended license.
Should you get a claim on your license bond, Jet will defend you. We will need any record you have regarding the case. This may be difficult if you have already provided the evidence to the ADOT, but even then, Jet’s professionals will work against any bureaucratic obtuseness.
Should the bond claim be valid, Jet will fulfill its obligation as a surety company and make payment to the injured party. Unlike insurance, the story doesn’t end there. The surety bond acts as a guarantee of payment and does not absolve responsibility for the damages caused. The auto recycler will need to pay Jet back in the amount of the claim. Failure to do will result in cancellation of the required bond and may carry other negative consequences to the license.
If the auto recycler happens to also sell more than seven vehicles a year, then they will need to get a license with the ADOT to do so, and that will require a motor vehicle surety bond that is offered by Jet.