How much does an auto dealer bond cost in Alaska?
Auto dealer surety bonds (also called motor vehicle dealer bonds and buyer’s agent bonds) are mandated by the Alaska Commissioner of Administration as part of the licensing requirements for dealerships to conduct business in the state. The commissioner sets the total bond amount based on the type of dealership:
- $50,000 bonds for motor vehicle dealers
- $25,000 bonds for motorcycle dealers
The surety company determines your premium rate, which is the percentage of the total bond amount you pay as the premium. Premium rates for Alaska auto dealer bonds typically cost between 1% and 3% of the total bond amount.
During the application process, the surety company evaluates your personal credit, financial statements, industry experience, and licensing history. Applicants with good credit generally receive the lowest rates, however, bad credit will not prevent you from securing an Alaska auto dealer bond. EZSurety still offers competitive rates to individuals with low credit scores or other financial issues.
Why are auto dealer bonds important in Alaska?
Alaska auto dealer bonds provide protection for customers, creditors, and the state government. When an Alaska motor vehicle dealer posts a surety bond, they provide a guarantee to the bond’s Obligee (the Alaska Commissioner of Administration) that they will conduct business in compliance with the conditions listed in the Alaska Statutes Chapter 66.
If the auto dealer fails to comply with the statutes, the surety company will pay out financial losses to damaged parties up to the full bond amount. The auto dealer is liable to reimburse the surety for any damages paid under the bond.
How to get your auto dealer license in Alaska
To obtain your auto dealer license in Alaska, you must meet the Alaska Division of Motor Vehicles licensing requirements by completing the following steps:
- Complete the application for dealer licensing
- Pay the $50 registration fee
- Post the appropriate surety bond
Alaska auto dealer licenses are valid for a two-year period.