Alabama Auto Dealer Bond

Sweet home, Alabama Where the skies are so blue Sweet home, Alabama (oh my baby) Lord, I'm comin' home to you (here I come, Alabama). No state has a more popular song dedicated to it than the state of Alabama. If you want to be an auto dealer in Alabama, you need to maintain a $50,000 Motor Vehicle Dealer Bond. The bond is required for dealers to acquire and maintain their auto dealer licenses. The licensing requirement applies to all auto dealers in Alabama, which includes new vehicle dealers, used vehicle dealers, wholesalers and vehicle rebuilders. The specific requirement is outlined in the Code of Alabama 1975.

Quick Overview

  • Who Needs It: all new, used, and wholesale dealership that sells automobiles, RVs, and/or motorcycles. Automotive dismantlers and parts recyclers also need the bond
  • Bond Amount: $50,000
  • Cost: Starts at $250 for one year, the exact price depends on the dealership owner’s credit score and history

To get started, simply click on the blue “Quote” button below.

Sample Payment and Performance Bond Form
Alabama Auto Dealer Bond Form
Motor Vehicle Dealer Bond

Bond Term: Continuous, minimum 1 year

Required By: Alabama's Department of Revenue, Motor Vehicle Division

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Acceptance Guaranteed
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Refund within 5 days if not satisfactory
1 Year Bond Starts at
1 Year Bond Price
of bond amount, based on credit check
based on your credit history
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Commonly Asked Questions: 

Why is the Alabama Auto Dealer Bond Required?

Fraud is very common among motor vehicle dealers, whether intentional or not. Actions such as odometer rollback can result in serious financial impact on the car buyers. Therefore, the bond is meant to achieve two goals: 

  • Prevent unqualified prospective motor vehicle dealers from obtaining their license. People with ultra-poor credit score or bankruptcy history often will not be able to obtain a bond due to higher risk of claim
  • Minimize losses to car buyers when current auto dealers commit frauds. When a current auto dealer commit a fraud, such as selling cars without a proper title, the car buyers can file a claim against the auto dealer and get paid for any financial damage from the bond claim

What Information Do I Need to Provide to Get the Bond? 

  • Dealership Name
  • Dealership Address, includes city, county and state
  • Does your dealership only sell cars or also conduct title service as designated agent?
  • Start date of the bond
  • Dealership owner information, such as name and social security number

If I Want to Be a Title Service Provider, What Bond Do I need? 

In the State of Alabama, the title service provider and the motor vehicle dealer use the same bond form. They just need to place check marks on different parts of the bond form. If you are applying for a motor vehicle dealer bond, please check the first box next to the “Master Dealer”. If you are applying to be a title service provider, you would need to check the boxes next to both “As a Designated agent” and “As a Title Service Provider”.

How Many Years Can I Get the Bond For? 

You can get your bond for up to three years. Your license is typically renewed every two years so we recommend you buy the bond with a two year term. If you buy a multi-year bond, the premium rate per year is typically cheaper

Why Do I Need to Provide My Social Security Number? 

Your credit score will be the main factor used to determine the pricing of your bond. The bond is based on different pricing tiers tied to your credit score. Only a soft credit check will be done on your credit so your credit score won’t be affected. 

Do Sales Volume Determine the Bond Amount? 

Some states, such as Hawaii, require a different bond for different sales volume. For example, the bond amount is $10k for used dealers who sell less than 60 vehicles a month. In the case of Alabama, the bond amount is the same regardless of how many vehicles you sell per month.

What Happens if my Bond is Denied?

We are a surety bond agency and we partner with 10+ bonding carriers that offer different pricing and have different underwriting appetite. Some have stricter requirements than others. We have a few bonding carrier partners who can accept applicants with a lower credit score. The downside is that they typically offer much higher prices to compensate for accepting candidates with lower credit score.

Do I Need a Hard Copy of the Bond? 

A hard copy is not required for the Alabama Motor Vehicle Dealer Bond. You can print out the digital version of the bond we emailed to you. Then you can type the name of the business representative and sign as the business representative. Then, you can submit the bond with the rest of the dealer license documents to the Motor Vehicle Division License Portal. You would need to register or login your MVTRIP account in order to apply for, renew and update your licenses. 

How Should I Make the Changes to the Bond?

To make changes on a bond, you can simply call us and request a rider form. We can change much information on the bond, including effective date, principal name, and principal address. If you would like to make a change on a bond, please give us a call at (888) 236-8589 or email us at

What Happens If I Forget to Renew My Bond? 

Your bond should be renewed before the expiration date. If you decide to bond with us, we will take care of your bond renewal. We will contact you 60 days in advance of your bond expiration date to remind you about your renewal and will work with you to get your bond renewed. 

How Do I Get an Alabama Auto Dealer License? 

1. Narrow down into one type of license you need
2. Decide on a corporate structure and register the business in the Secretary of State
3. Find a dealership location and submit the pictures of the location to the state DMV
4. Set up a sign 
5. Make sure there is enough lots at the location 
6. Register for an account on the Alabama Motor Vehicle License portal
7. Obtain the $50,000 Alabama Motor Vehicle Dealer Bond 
8. Obtain a garage liability insurance 
9. Complete the license application 
10. Pay all associated license fees

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