Alabama Auto Dealer Bond & Designated Agent Bond
How Much Does An Alabama Auto Dealer Bond Cost?
This is the question we hear the most as soon as we answer the phone. I wish there was a simple answer for this. However, the fact is that rates can vary greatly on getting your Alabama auto dealer bond, depending on several factors. First, the credit rating of the owners will have the greatest impact on the premium or price paid for the surety bond. Simply put, the better the credit rating, the cheaper the cost of the bond. However, this is not the only factor to take in when purchasing an Alabama auto dealer bond. Have you had a claim in the past? If so, and an insurance has paid out a claim, chances of you being able to obtain will be pretty slim.
Alabama auto dealer bonds will range from .7% to 20% of the penalty amount which is currently set by the state at $25,000. This amount cannot be more nor can it be less. In short, an applicant with good credit and that has been in business for a few years can expect to pay between $175 and $500 per year. Those with credit problems can probably expect to pay between $750 and $2500 depending on how bad the personal credit is. We usually give multiple year discounts on your dealer bond so be sure and look for the 2 year discounted quote offer on your invoice and renewals.
Do I Need An Alabama Auto Dealer Bond?
The State of Alabama mandates that all persons wanting to get an Alabama auto dealer license must provide a surety bond in the amount of $25,000. This is required for all new auto dealers and used auto dealers. The designated agent bonding requirement is included in this auto dealer bond. For more information on how to obtain an AL dealer license, visit the Absolute Surety blog!
What Does My Personal Credit Have To Do With The Auto Dealer Bond Premium?
Premiums of Alabama auto dealer bonds will be greatly based on the owners personal credit score. This is because if a surety company has to pay out a claim, they want to make sure the applicant has a good track record of paying that debt back. Unlike insurance, if you have a valid claim on your auto dealer bond, the insurance company will look to the applicant to repay the debt. Untimely payments on your report will result in a higher bond premium.
When Do The Alabama Auto Dealer Bonds Expire?
The Alabama auto dealer surety bond will expire one year after the effective date. If your current effective date is October 1, your bond will expire on September 30th. You may also choose to purchase a 2 year bond at a discounted rate. You can usually get a 25% discount on the second year premium. We highly suggest doing this as it will save you money and also the hassle of paperwork ever year.
I Just Purchased My Auto Dealer Surety Bond…Now What?
Alabama requires all dealers to login to the Motor Vehicle Dealer Regulatory License Portal in order to download their surety bond. After you log in, you will need to save the surety bond as a PDF and email us the attachment. We will then sign, seal and forward you the original surety bond along with a poser of attorney.
The auto dealer surety bonds are also known as MVD bonds, motor vehicle dealer bonds, used car dealer bonds, and many others. Most popular cities in Alabama for the auto dealer bonds are Birmingham, Mobile, Tuscaloosa, Montgomery, Huntsville, and Auburn. No matter what city you are in the Alabama auto dealer surety bond will cover the whole state.