Motor Vehicle Dealers - Used Vehicles Only

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.