Motor Vehicle Dealer Surety Bond

The Arizona $25,000 Motor Vehicle Dealer Bond is a licensing requirement for motor vehicle brokers, wholesale motor vehicle dealers, and wholesale motor vehicle auction dealers operating in Arizona. The bond must be issued by a surety company authorized to conduct business in Arizona and filed with the Arizona Department of Transportation Motor Vehicle Division.

The bond protects individuals who suffer a financial loss because the dealer fails to remit prepaid title, registration, or other related fees or taxes. It also provides protection when a dealer fails to deliver a valid certificate of title that is free from a previous owner’s interest and undisclosed liens, except for liens created by or expressly accepted in writing by the vehicle’s buyer.

This is a $25,000 surety bond, not traditional insurance coverage for the dealer. The State of Arizona is the obligee, the licensed dealer is the principal, and the surety company guarantees the dealer’s compliance with the bond’s requirements. The bond remains continuous and may generally be canceled only after the Arizona Department of Transportation receives at least 60 days’ advance notice.

This bond is intended for the following Arizona license types:

• Motor vehicle broker
• Wholesale motor vehicle dealer
• Wholesale motor vehicle auction dealer

Public consignment auction dealers are subject to a different $100,000 bond requirement.