Alabama Motor Vehicle Dealer License Surety Bond
Who is required to obtain a New / Franchised Motor Vehicle Dealer License Bond?
As of August 1, 2014 the Alabama Departent of Revenue has changed the requirement for all Motor Vehicle licenses to now be known as a Dealer Regulatory License and it encompasses all new and used motor vehicle dealers, wholesale dealers, reconditioners and rebuilders. Licensee must post a $25,000 Dealer Regulatory License bond as part of the licensing requirements.
A Franchised New Motor Vehicle Dealer is any person, firm, or corporation under franchise contract in this state with a manufacturer or distributor of new motor vehicles and is actively engaged in the business of selling, advertising, or negotiating the sale of new motor vehicles or new and used motor vehicles.
A Used Motor Vehicle Dealer is any person, firm, or corporation engaged in buying, selling, exchanging, advertising, or negotiating the sale of 5 or more motor vehicles during a calendar year, whether or not the motor vehicles are owned by such person, firm, or corporation, or in offering or displaying motor vehicles for sale at retail to the public. (The term "selling" or "sale" is intended to include "lease-purchase transactions". Banks, credit unions, and licensees of the State Banking Department, and finance companies which acquire motor vehicles as an incident to their regular business and does not include motor vehicle rental and leasing companies are not considered aused motor vehicle dealer. As of August 1, 2014, this definition will also include motor vehicle rebuilders and motor vehicle wholesalers.
A Motor Vehicle Wholesaler is any person, firm, or corporation engaged in the business of buying, selling, or exchanging motor vehicles at wholesale to motor vehicle dealers only, no sales to the public.
Other licenses that require a Dealer Regulatory License Surety Bond:
$25,000 Motor Vehicle Wholesaler License Bond
$25,000 Motor Vehicle Reconditioner Bond
$25,000 Automotive Dismantler and Parts Recycler License Bond
Additional information on required licenses can be found on the AL Dept of Revenue website.
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