Arizona Auto Dealer Bond Overview
When getting licensed, motor vehicle dealers in Arizona are required by the Arizona Department of Transportation to obtain an Arizona auto dealer bond. This surety bond serves as a protection to the state and public, by guaranteeing that licensed Arizona auto dealers do business in accordance with all regulations that apply to their business license.
The auto dealer bond provides financial compensation to the state and consumers in cases of fraud or dishonesty on the part of auto dealers. An auto dealer bond is therefore, like all surety bonds, an agreement between the auto dealer (as principal), the Arizona Department of Transportation and public (as obligees), and the surety.
If an auto dealer does not comply with regulations, a claim can be made against his bond. The surety will then compensate obligees. In turn, the auto dealer must compensate the surety for any claims it has paid.
Have a look at the sections below to learn more about your bond’s cost and the licensing requirements for auto dealers in Arizona.
Arizona Auto Dealer Bond Cost
Depending on the type of license they are applying for, Arizona auto dealers are required to post one of the following bonds:
|Bond Cost by Credit Score|
|Bond Type||Bond Amount||
New motor vehicle dealers,
Used motor vehicle dealers,
Public consignment auction dealers
|Brokers, Wholesale auto auction dealers, Wholesale motor vehicle dealers||$25,000||$188-$375||$250-$750||$625-$1,250||$1,250-$2,500|
Your Arizona auto dealer bond’s cost, or premium, varies depending your own financial status. It is a percentage of the bond’s total amount.
The premium you are offered by your surety reflects their assessment of your financial strength and reliability. Factors which sureties take into account include:
- Personal credit score
- Financial statements
- Your asset profile
- Your industry experience
Sureties consider personal credit score the most central financial indicator of applicants’ financial stability. Applicants who have a high credit score are therefore offered lower rates on their bonds. This translates to a premium of 1%-3% of the total bond amount for high-credit-score applicants, a so-called standard market rate. Or, if you have a slightly lower rate, your rate will vary between 3%-7.5%.
There are other ways to get a good rate on your Arizona auto dealer bond. Most importantly, it matters which surety bond agency you work with.
Bryant Surety Bonds is the #1 surety bond producer in the state. We only work with expert companies who are A-rated and T-listed. By obtaining your bond through us, you can get the lowest possible rate on your bond!
If you’d like to make an estimate calculation of your Arizona motor vehicle dealer bond’s cost, try our surety bond calculator in the right sidebar. For a free and precise quote on your bond apply online here and we will contact you within a short amount of time.
Don’t hesitate to give us a call (866)-450-3412 if you have any questions, doubts, or trouble with applying!
And if you want to know more about how bond rates are determined, our surety bond cost page is the right place to go!
Bad Credit Dealer Bonds**
Surety bond companies avoid issuing bonds to applicants who have a low credit score. This is due to the perception that applicants with poor or no credit constitute too great a risk to be bonded.
Contrary to this perception, we have developed a program which makes it possible for such applicants to get bonded. Our Bad Credit Surety Bond Program allows you to get bonded by paying a slightly higher rate, between 7.5%-10%. Regardless of the rate you get, you receive a bond which is backed by our highly professional partners. This is guaranteed!
Arizona Auto Dealer License Application and Renewal
Getting an Arizona auto dealer surety bond is only part of the process. In addition to the bond, you also need to fill in and obtain a number of documents, along with paying a couple of fees. The address to submit your auto dealer license application is:
Motor Vehicle Division
Dealer Licensing Unit
P.O. Box 2100
Phoenix, AZ 85001
As you prepare your application, be sure to include these documents:
- A criminal record check
- A copy of the Buy/Sell Agreement if you are purchasing a dealership
- A certificate of appointment if you will be selling new cars
- Documents about the place of business
- Articles of incorporation or partnership agreement
- Copy of fingerprints
Make sure to check with the Arizona Department of Transportation prior to submitting your application. You will need to pay a number of fees prior to and after having your application approved. These are:
- $15 Filing (when submitting your application)
- $22 Criminal Records Check (per individual; when submitting your application)
- $100 License
- $10 Provisional License
- $50 Branch Office (if applicable)
Dealer licenses are valid for a year and must be renewed on or before the expiration date. If the continuation fee is paid after the expiration date, a penalty fee must also be paid.
When renewing your license, you can also get a better a better rate on your bond. You can lower your surety bond rate by working on your credit score and improving your financials over time.
Get Your Arizona Auto Dealer Bond Today
Approvals of Arizona auto dealer bond applications are usually very fast. To get started, apply online and fill in your bond application form. Once you submit your application we will contact you with your free quote.
Want to know more before you apply? Our lines are open for you anytime! Call us at (866)-450-3412 to consult with one of our surety bond experts. We can provide you with more information about the Arizona auto dealer bond, as well as assist you in the application process. Don’t hesitate, call us!