Flag_of_Alabama.svg
An official website of the Alabama State government.
Here's how you know

The .gov means it's official

Government websites often end in .gov or .mil. Before sharing sensitive information, make sure you’re on an official government site.

The site is secure

The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.

  • Homepage
  • >
  • What are the bonding requirements?
View All Dealer License, General FAQs

What are the bonding requirements?

All licensees are required to submit to the department a continuous bond in the amount of $50,000. All dealers are required by law to become designated agents of the department. The dealer bond also satisfies the designated agent bonding requirement. (Section 40-12-398, Code of Alabama 1975)

All licensees are required to submit to the department a continuous bond in the amount of $50,000. All dealers are required by law to become designated agents of the department. The dealer bond also satisfies the designated agent bonding requirement. (Section 40-12-398, Code of Alabama 1975)
Related FAQs in Dealer License, General
All licensees are required to submit to the department a continuous bond in the amount of $50,000. All dealers are required by law to become designated agents of the department. The dealer bond also satisfies the designated agent bonding requirement. (Section 40-12-398, Code of Alabama 1975)
  • Master Dealer License: $125
  • Each additional place of business: $5
  • Off-site sales license: $25
  • Master Off-site Sales License: $25

(Off-site sales licenses must be purchased at least 10 calendar days prior to sale.)

Each dealer must maintain blanket liability insurance coverage for all vehicles owned or associated with the business.

Minimum insurance limits are:

  • $25,000 bodily injury/person/accident
  • $50,000 combined bodily injury/accident
  • $25,000 property damage/accident or a combined single limit of $75,000/accident

(§402-12-392, Code of Ala. 1975)

Processing time is approximately 3-5 business days from when the documents are received by our Department.
You can only obtain the bond and insurance form by applying for a dealer license.
All new and used motor vehicle dealers, including motorcycle and trailer dealers (excluding trailers not subject to titling), wholesale dealers, and rebuilders. (Section 40-12-391, Code of Alabama 1975)