State of Alabama - Bond Of Motor Vehicle Dealer and Designated Agent
Required for used motor vehicle dealers in Alabama to obtain or renew their dealer license. Protects the state and consumers from fraudulent practices.
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About This Bond
The State of Alabama Motor Vehicle Dealer and Designated Agent Bond is a surety bond required for used motor vehicle dealers operating in Alabama. This bond ensures compliance with state regulations governing the sale of used vehicles and protects consumers from fraudulent or unethical business practices.
Who Needs This Bond: All used motor vehicle dealers in Alabama must obtain this bond as part of their licensing requirements. The bond applies to both new license applications and license renewals, and dealers must complete their licensing paperwork online through the state system.
Protection and Coverage: This $50,000 bond protects the State of Alabama and consumers who purchase vehicles from licensed dealers. It provides financial recourse if the dealer violates state motor vehicle laws, engages in fraudulent practices, or fails to fulfill contractual obligations to customers. The bond amount was increased to $50,000 effective October 1, 2020, under HB 393.
Bond Details: The bond has a one-year term and is renewable annually. The state generates a partially completed bond form upon acceptance of the dealer's license application, which must then be completed by the surety company and returned to maintain proper documentation.
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At a glance
Alabama Auto Dealer Bond Key Facts
Governed by Code of Alabama 1975 § 40-12-398.
The basics
What Is an Auto Dealer Bond in Alabama?
An Alabama auto dealer bond is a $50,000 surety bond you must file with the Alabama Department of Revenue (ALDOR) to get or renew a motor vehicle dealer license. Alabama requires the same $50,000 continuous bond for every dealer type — new, used, rebuilder, wholesaler, and master dealers.
Good to know - Required for every Alabama motor vehicle dealer license — new, used, rebuilder, wholesaler, and master dealers. The same $50,000 bond also satisfies Alabama’s separate designated-agent bonding requirement.
The bond is a promise that you will follow Alabama’s motor vehicle laws and pay valid claims. If you break the law or cause someone a financial loss, a customer or the state can file a claim against your bond up to $50,000.
The bond protects the public, not you. If a claim is paid, you must repay the surety company. Your $50,000 dealer bond also covers Alabama’s separate "designated agent" bonding requirement, so you do not post a second bond.
Qualification
What You Need to Qualify for a Alabama Auto Dealer Bond
Approval depends on your dealer license type, required coverage amount, and underwriting factors such as credit.
- You are applying for, or renewing, an Alabama motor vehicle dealer license through ALDOR’s MyDMV portal.
- You will hold one of the licensed dealer types: new, used, rebuilder, wholesaler, or master dealer.
- Your bond is written by a surety company authorized to do business in Alabama.
- You can keep the $50,000 bond continuous — it must stay on file without a lapse and renew each license year.
- You have your business details ready (legal business name, ownership, and Alabama business location).
Step by step
How to Get an Auto Dealer Bond in Alabama: Step by Step
Start your application in MyDMV
Create an account on the Alabama Partner Registration portal in MyDMV and begin your dealer license application. When you submit it, the portal gives you a transmittal sheet listing the documents to upload.
Get your $50,000 surety bond
Buy your bond and we handle the paperwork. We issue your Alabama Motor Vehicle Surety Bond and, in most cases, file it electronically with ALDOR. There is no bond form for you to download or complete — in Alabama it is generated through your dealer license application.
Upload your documents and pay your fees
Submit the documents listed on your MyDMV transmittal sheet and pay your dealer license fees through the portal. Alabama’s $50,000 bond also satisfies the designated-agent bonding requirement.
Keep your bond active
Alabama requires a continuous bond. Renew it before each license year ends so your coverage never lapses — your dealer license cannot stay active without the bond on file.
Paperwork
Alabama Dealer Bond Forms & Documents
The $50,000 dealer bond — we issue this and, in most cases, file it electronically with ALDOR for you. In Alabama it is generated through your dealer license application.
View formSubmitted electronically through the MyDMV / Alabama Partner Registration portal.
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Cost
How Alabama Auto Dealer Bond Pricing Works
You do not pay the full $50,000. That figure is the coverage — the most a claim can collect. You pay a premium, which is a small percentage of the bond amount.
Your premium is set by underwriting, mostly your personal credit. Well-qualified applicants pay a low rate. The premium is separate from your ALDOR license fees.
Worked example
Alabama’s bond is $50,000 for every dealer type. You do not pay $50,000 — you pay a premium, often a few hundred dollars a year for well-qualified applicants.
Filing
Filing Information
Alabama Department of Revenue (ALDOR) — Motor Vehicle Division
Filing notes
Apply online. Alabama dealer license applications and documents go through the MyDMV portal (mydmv.revenue.alabama.gov/TAP) — the bond and insurance form is generated when you apply.
Alabama requires a continuous $50,000 bond. It must stay on file without a lapse and renews with your dealer license each license year.
We issue your Alabama Motor Vehicle Surety Bond for your ALDOR application and, in most cases, file it electronically for you.
FAQ
Alabama Auto Dealer Bond FAQ
Yes. Every Alabama motor vehicle dealer must file a continuous $50,000 surety bond with the Department of Revenue (Code of Alabama 1975 § 40-12-398).
It is $50,000, and the amount is the same for every dealer type — new, used, rebuilder, wholesaler, and master dealers.
Yes. Your $50,000 dealer bond also satisfies Alabama’s separate designated-agent bonding requirement, so you do not post a second bond.
Everything is filed online through ALDOR’s MyDMV portal. We issue your Motor Vehicle Surety Bond and, in most cases, file it electronically for you — there is no bond form for you to complete.
You pay a premium, not the full $50,000. The premium is a small percentage of the bond amount, based mainly on your credit. Start a quote to see your rate.
Alabama requires a continuous bond — it stays on file with no expiration and renews with your dealer license each year. You can buy it on a 1, 2, or 3 year premium term; coverage stays continuous as long as you renew.
The Alabama Department of Revenue (ALDOR) Motor Vehicle Division. You can reach the division at (334) 242-9000 or through ALDOR’s online Help Center.
Sources
Last verified 2026-06-30. Requirements change - confirm current details with Alabama Department of Revenue (ALDOR) — Motor Vehicle Division before you file. This page is informational and not legal advice.
FAQ
Alabama Auto Dealer Bond Questions
The cost of a Alabama auto dealer bond is usually a small percentage of the state-required bond amount. Your exact premium depends on the bond amount, license type, business details, and underwriting factors such as credit.
Many auto dealer bonds can be issued the same day after you complete the application. Larger bond amounts or applications that need underwriting review may take longer.
Requirements vary by license type, but most Alabama auto dealers need to complete a short application and purchase the bond amount required by the state before their license can be issued or renewed.
Often, yes. Many states have separate bond requirements for wholesale, retail, broker, or other dealer license types. Choose the bond that matches your Alabama license instructions.
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AutoDealersBond.com is operated by Shield Liability Insurance Agency, a California and Texas licensed insurance agency (CA License #6018195, TX License #3446536). Shield Liability Insurance Agency is not an insurance carrier and does not underwrite bonds or insurance policies. Bond and coverage availability, pricing, and issuance are subject to carrier underwriting approval, eligibility, applicable state requirements, and policy or bond terms. Availability varies by state.
