Alabama Motor Vehicle Dealer Bond at a glance
| Bond amount | $50,000 |
|---|---|
| Required by | Alabama Department of Revenue, Motor Vehicle Division |
| Statute | Ala. Code § 40-12-398 |
| Where we’re licensed | Alabama — and all 50 states |
Requirements last reviewed September 2026. Amounts are set by the authority above and can change — we confirm the current figure before you bond.
What Alabama requires
If you are licensed in Alabama, the Alabama Department of Revenue, Motor Vehicle Division requires a motor vehicle dealer bond of $50,000. Raised from $25,000 (HB 393, 2020); same amount across dealer classes.
What a motor vehicle dealer bond guarantees
A dealer bond protects car buyers and the state — not your dealership. It guarantees you will comply with your state’s motor vehicle and dealer laws: remitting taxes and fees, providing clear title, and avoiding fraud or misrepresentation in sales. If the surety pays a valid claim, you must reimburse it in full. It is a licensing and consumer-protection requirement, not insurance for your business.
How much a dealer bond costs
The bond amount is set by your state (and often your dealer type — franchised new-car, used/independent, wholesale, and motorcycle dealers frequently carry different amounts). The premium you pay is a small percentage of that amount — typically around 0.5%–2% for dealers with reasonable credit, more for weaker credit. On a $50,000 bond that is often a few hundred dollars a year. Many states issue the bond on a two-year term.
Frequently Asked Questions
How much is a motor vehicle dealer bond in Alabama?
The bond amount in Alabama is $50,000, set by the Alabama Department of Revenue, Motor Vehicle Division. You do not pay that amount — you pay a premium, a small percentage of it, based on your credit and the bond required. We confirm the current figure and quote it across multiple surety markets.
Who requires a motor vehicle dealer bond in Alabama?
The Alabama Department of Revenue, Motor Vehicle Division requires it under Ala. Code § 40-12-398. The bond protects the public and the state — not your business — and if the surety pays a claim, you must reimburse it.
How do I get a motor vehicle dealer bond in Alabama?
Request a quote or contact our team. We verify the current requirement, market your bond across multiple surety companies, and handle the filing. Cory Washington & Co. LLC is licensed in Alabama and all 50 states.
← Motor Vehicle Dealer Bond (national overview) · Business insurance in Alabama
All surety bond descriptions on this website are provided by Cory Washington & Co. LLC strictly for general informational purposes. They are not intended to be, and should not be relied upon as, legal, financial, or bonding advice. Surety bonds are not insurance. Bond requirements — including amounts, obligees, and bond forms — are set by government authorities and other obligees and change over time; the information presented is general in nature and does not guarantee the availability, terms, conditions, or amount of any bond. Actual bond terms are governed by the bond form issued by the surety and the requirements of the obligee, and any bond remains subject to underwriting approval. Nothing on this website creates or implies an agent-client relationship, binds a surety, or issues a bond. Cory Washington & Co. LLC expressly disclaims any liability for actions taken, or not taken, based on the content provided here. For advice regarding your particular situation, please confirm current requirements with the relevant authority and consult directly with a licensed professional at Cory Washington & Co. LLC.