Auto dealer surety bonds (also called motor vehicle dealer bonds) are mandated by the Motor Vehicle Division of the Arizona Department of Transportation (ADOT) as part of the licensing requirements for dealerships to conduct business in the state. The ADOT sets the total bond amount based on the type of dealership license:
The surety company determines your premium rate, which is the percentage of the total bond amount you pay as the premium. Premium rates for Arizona 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 Arizona auto dealer bond. EZSurety still offers competitive rates to individuals with low credit scores or other financial issues.
Below are the lowest premiums EZ Surety has issued for auto dealer surety bonds in the State of Arizona.
Arizona auto dealer bonds provide protection for customers, creditors, and the state government. When an Arizona motor vehicle dealer posts a surety bond, they provide a guarantee to the ADOT that they will conduct business in compliance with the conditions listed in the Arizona Revised Statutes, Title 28 – Transportation.
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.
To obtain your auto dealer license in Arizona, you must meet the ADOT dealer licensing requirements by completing the following steps:
Auto dealers who seek to provide financing contracts to their customers will also have to obtain a motor vehicle dealer license from the Arizona Department of Financial Institutions (AZDFI). Dealerships must submit a separate application to obtain the license along with a $300 application fee. Dealers must renew their AZDFI license annually for a fee of $150.