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Who Is Required To Purchase an Arizona Auto Dealer Bond?
Arizona requires all motor vehicle dealer license classifications to purchase a surety bond before they will finalize your application and issue you a license.
Here's a table outlining the dealer bond amounts required by the different classifications:
| License Classification | Bond Amount | Get a FREEE Quote |
|---|---|---|
| New vehicle dealer | $100,000 | |
| Used vehicle dealer | ||
| Public consignment auction dealer | ||
| Wholesale vehicle dealer | $25,000 | |
| Wholesale auction dealer | ||
| Vehicle (private) broker | ||
| Automotive recycler | $20,000 |
It's important to remember, each license type or classification is it's own independent process. This means each additional license requires it's own application and surety bond.
Why is an Arizona Motor Vehicle Dealer Bond Required?
One of the jobs of the Arizona Department of Transportation is to protect the Arizona public. This is why they require the various types of vehicle dealers, wholesalers, and auctioneers to obtain an official license to conduct business.
It's unfortunate, but there are dealerships in Arizona who will purposefully harm their customers to increase profits.
Examples of these fraudulent acts include:
- Failing to transfer a title correctly or falsifying a vehicle title
- Selling vehicles with a missing title
- Misrepresenting vehicle’s mileage, manufacture year, or condition to make a sale
- Stealing customer deposits or forcing customer to pay fake fees
- Neglecting to pay sales taxes to the Arizona Department of Revenue
Part of obtaining your Arizona dealer license is purchasing a surety bond.
The surety bond is your commitment and guarantee that you will follow the rules and give your customers the best service.
How Much Does an Arizona Auto Dealer Bond Cost?
Each of the Arizona auto dealer bonds require a quoted rate from a surety. The surety is the insurance company that writes surety bonds.
The surety will determine a rate based on:
- Primarily your personal credit
- Business industry and experience
- Prior bond claims from prior licenses if applicable
Every surety uses their own assessment of these criteria to determine "their" rate. This means rates will be different and this means the final price of the bond can vary - potentially - by hundreds of dollars.
When you request your free quote, we’ll work with our network of A-rated sureties and find you the lowest possible price.
Here are some example prices using the $100,00 bond amount. These are ranked from really good rates to average:
| Bond Amount | Surety Bond Rate | Price You Pay |
|---|---|---|
| $100,000 | 0.5% | $5000 |
| $100,000 | 1% | $1,000 |
| $100,000 | 1.5% | $1,500 |
| $100,000 | 2% | $2,000 |
| $100,000 | 2.5% | $2,500 |
| $100,000 | 3% | $3,000 |
| $100,000 | 3.5% | $3,500 |
But the only way to know your pricing is to request a free quote and get your pricing today.
Click here to start the quote process. Select the correct bond for your license and start your quote today and you can have exact pricing in one business day.
Once you receive your pricing, you’ll be able to make the right decision for your business and licensing timeline.
How Long Does The Arizona Auto Dealer Bond Last?
Arizona dealer licenses have a term or duration of one year, at which time you must renew your license.
The auto dealer surety bond follows a similar term or duration. From the bond's effective date, it's active for one year at which time it must be renewed.
Renewing your bond is easy.
Your bond specialist will contact you 30 to 45 days in advance to make sure the renewal premium is paid on time so your bond remains active.
This dealer bond is a continuous bond. This means the original bond stays on file with Arizona and all you have to do is pay the renewal premium.
Once you pay the renewal premium, you don't have to do anything else. Your bond is active and you can continue selling vehicles.
The Best Way To Purchase Your Arizona Dealer Bond
Surety Bonds Direct is a specialized surety agency. We work with multiple A-rated sureties for three reasons:
- One, to find you the lowest possible price on your dealer bond
- Two, to guarantee your bond will be accepted by the Oklahoma Motor Vehicle Commission
- Three, A-rated sureties have better claims departments and are unlikely to pay out frivolous claims against you
Getting a quote is free with no obligation to purchase. You can use our online quote request form to start the quote process. It takes 90 seconds to complete. A bond specialist will reach out to you when rates have been collected. This typically takes one business day or less.
You can also call 1-800-608-9950 and speak with a bond specialist directly to start the quoting process.
Once you have pricing and purchase your bond, it can be issued and emailed to you within one business day.
Motor Vehicle Dealer Bonds And Getting Your Arizona Business License/Registration
Read our blog post that will take you through the steps to get your Arizona auto dealer license.
At a high level, the steps are:
- Determine the license or licenses you need to conduct business
- Complete the application thoroughly
- Purchase the appropriate surety bond or surety bonds if you're obtaining multiple licenses
- Get the required criminal background check for all members and/or officers of the business entity
- Provide the buy agreement if you're purchasing a dealership
- Provide the manufacturer agreement if you're a new, franchises dealership
- Ensure you meet all of the necessary business location, signage, and display requirements
- Provide a copy of the LLC or corporation paperwork on file with the Arizona Corporation Commission
- Purchase the correct number of dealer plates if you require dealer plates
- Get your license issued
Additional Arizona Motor Vehicle Dealer Bond Resources & Links
Arizona motor vehicle dealer surety bonds are continuous and require 60 days prior written notice to the Arizona Motor Vehicle Division in order to effect cancelation.
AZDOT Motor Vehicle Industry Licensing Information
Arizona Motor Vehicle Division Vehicle Dealer Bond Form
Arizona State Legislature Arizona Revised Statutes Title 28 - Transportation
Arizona Motor Vehicle Division Contact Information - Arizona Motor Vehicle Division, Dealer Licensing Unit- Mail Drop 552M, P.O. Box 2100, Phoenix, AZ 85001-2100, www.azdot.gov
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