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Arizona Auto Dealer Bond

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What is an Arizona Auto Dealer Bond?

In Arizona, auto dealers must hold a valid license if they sell more than four vehicles during the year. To comply with this regulation, licensed auto dealers must also have an Arizona auto dealer bond. The bond requirement is in place to protect customers when dealing with a licensed auto dealership. If illegal or fraudulent business practices cause financial harm to the customer, a claim can be made against an Arizona auto dealer bond.

Like other surety bonds, an Arizona auto dealer bond is a contract between the dealership, known as the principal, the surety company providing the bond, and the Dealer Licensing Services agency within the Arizona Department of Transportation, known as the obligee. The surety company guarantees that payment for legitimate claims will be made on behalf of the licensed auto dealer. However, claims are ultimately repaid by the dealership.

What Does an Arizona Auto Dealer Bond Cost?

The state requires an auto dealer bond of either $25,000 or $100,000 to be in place, depending on the type of auto dealer business you operate. Brokers, wholesale auto auction dealers, and wholesale motor vehicle dealers require a $25,000 bond. Any new and used motor vehicle dealers must have a $100,000 Arizona auto dealer bond.

Fortunately, the entire bond amount does not fall on your shoulders. You only pay a percentage of the bond requirement, typically ranging from 1 to 3%. The surety company providing your bond reviews your personal credit and business financials to determine the price you pay. If you have had credit issues in the past, such as court judgments or liens, you will pay a higher percentage because you are a greater risk for a bond claim.

How Do I Get an Arizona Auto Dealer Bond?

To get your Arizona auto dealer bond, you can submit a simple request form online. The surety company reviews your information and provides a fast quote for your bond, and then provides direction on any application requirements you need to submit and how to finalize the process.

Frequent Questions

What does an auto dealer bond cost?

Costs are a percentage of the auto dealer bond amount that's required of you, which is based on your personal credit. Use our bond pricing tool to get a quick ballpark estimate.

Can I get a bond with bad credit?

Yes. You can get you approved for a bond regardless of your credit situation. However, the price will increase. You can apply to get an instant approval. As the largest writer of surety bonds in the U.S., we have access to high risk markets that many other agencies do not.

How long does the application take?

It only takes minutes, as we can approve you for your bond instantly online. You can get a no obligation quote on our website at any time.

Can I get auto dealer bond insurance to protect myself?

No. An auto dealer bond does not protect you, it protects the public. However, you can protect yourself or your customers by getting fidelity bonds.

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Jennifer Henson
Our company has been with JW Surety for several years now so when we needed to obtain a bond for a new company, we immediately went to them for help. Our rep, Melissa, was extremely helpful and prompt which made the process extremely easy for me.
David Tillotson
Trying to get a local Surety Bond was like driving a car on three tires. I searched Surety Bonds and found JW Surety Bonds. I got online and filled out the information and with in 30 minutes received a response from Melissa. She was informative, friendly and helpful. One more super satisfied customer.

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