Arizona Motor Vehicle / Auto Dealer Bond Cost

While $100,000, $25,000, or even $20,000 might seem like a large amount to pay, in reality, you only need to pay a percentage of it to get bonded, which is called the bond annual premium. The surety company will look at several factors to determine your motor vehicle dealer bond cost, most importantly, your credit score. Factors such as years licensed and years of industry experience will also play a factor in your dealer bond cost.

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• If your credit score is above 650, you’ll likely have to pay between .75% and 2% of the bond amount.

• For applicants with credit scores between 600 and 649, the rates range between 2.5% and 4%.

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Who is required to be licensed?

The surety bond requirement applies to all new or used motor vehicle dealers that are doing business in the state of Arizona.

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Bond types

• $100,000 - Used Motor Vehicle Dealer Surety Bond -  A person, other than a new motor vehicle dealer, who buys, sells auctions, exchanges or offers or attempts to negotiate a sale or exchange of any interest in, or who is engaged in the business of selling, seven or more used motor vehicles in a continuous 12 month period. *Used motor vehicle dealer does not include a wholesale motor vehicle auction dealer or public consignment auction dealer.

• $100,000 - New Motor Vehicle Dealer Surety Bond - A person who buys, sells, exchanges, or offers or attempts to negotiate a sale or exchange of any interest in, or who is engaged in the business of selling, new motor vehicles or used motor vehicles taken in trade on new motor vehicles or used vehicles purchased for resale.

• $100,000 - Public Consignment Auction Dealer Surety Bond - A person who at the public consignment auction dealer’s established place of business or at an authorized off-premises location pursuant to the requirements of 28-4401 in the business of both of the following: Conducting live auctions with a licensed auctioneer verbally calling for and accepting bids, and providing live auction services to the public on a consignment contract basis

• $25,000 - Broker Surety  Bond - A Broker acts as a locator service, for a fee, to find a specific vehicle for a customer and provide a service of arranging or assisting in effecting the purchase of a specific motor vehicle. You may not advertise for sale or exchange any specific motor vehicle OR Be an employee or agent of a new, used, auctioneer, manufacturer or a wholesale dealer

• $25,000 - Wholesale Auto Auction Dealer Surety Bond - A person who is in the business of providing auction services solely in wholesale transactions to motor vehicle dealers license by the state of any other jurisdiction, and who neither buys, sells nor owns the motor vehicles he or she auctions in the ordinary course of business.

• $25,000 - Wholesale Motor Vehicle Dealer - A person who sells used motor vehicles only to  licensed motor vehicle dealers

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What are the insurance recommendations?

It is required that all motor vehicle dealers in the state of Arizona obtain liability insurance coverage. Some examples include:

• Garage Liability Policy with a minimum of $40,000 Premises and Auto Liability Coverage

• Dealer Inventory Physical Damage Coverage

• Uninsured and Underinsured Motorist Coverage

• Garage Keepers Coverage - (if you do repairs, or paint & body work)

• Property Coverage for any buildings or tools

• Medical Payments of $1,000, $2,000, or $5,000

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How to become a motor vehicle dealer?

Step 1: Sign up for an account with ADOT Force(link is external)

New applicants and existing Dealers will be able to use the Dealer Community(link is external) to submit new applications, and to make changes to existing licenses. Dealers can submit applications to order new, cancel or replace plates, add/delete contacts and various other functions

Once a new application is submitted with all required documentation and photos, the Dealer Licensing Unit will review the application and inform the applicant of the status. Applicants may also monitor the status of submitted applications in the Dealer Community(link is external).

Select the application type that fits your dealership's needs. Provide all required documents for the license type including photo requirements. When completing the AZ MVD Now application, the email used for the Dealer Account must be unique and not associated with any other account, including personal AZ MVD Now accounts. Please do not self register this account, it must be set up by the Dealer Licensing Team.

 

Step 2: Required documents

Notice: Paper applications are no longer accepted and will be returned. Please follow the steps outlined below to submit electronically.

The following forms must be attached to ALL applications:

• Authorized Presence Documentation(link is external)

  • Note: This is only required for an individual or a sole proprietorship.

• AZ MVD Now Dealership Administrator Application(link is external)

• Authorization To Release Information - Statement of Personal History(link is external)

Additional items that may be required based on the Dealer License type are:

• Photos of the office space, locking cabinet for dealer paperwork, business sign, posted business hours and all four sides of the building

• If dealer is located is a Suite or complex, 2 labeled dedicated parking spaces

• Articles of Incorporation (if applicable)

• Transaction Privilege Tax License for the current year and address of proposed dealership

• Dealer Bond with Power of Attorney (amounts vary based on dealer type), make sure all signatures are present

• A letter of Intent (New Car Dealers only)

• Photo of Perimeter fence (only Auto Recyclers)

• Photo of sign stating “Vehicles are sold as is” and “No implied Warranty” (only Wholesale auction and Public Auction)

For additional assistance and tools during the application process please visit the Dealer Community Help site:

Step 3: Obtain fingerprints and background information. 

Submit online

Each applicant will need to register and pay for the service via the Arizona Applicant Processing Services(link is external).

Each applicant will need to provide this code: VDR-059.A to the Fingerprint Technician at the approved site at the time of fingerprinting.

• Authorization to Release Information/Statement of Personal History: Dealer

  • Note: This is only required for owners who are at least 20% stakeholders.

 

Step 4: Pay the applicable invoiced fees via your AZMVDNow.gov account

If additional information is needed please email the Dealer Licensing team at aacc@azdot.gov

 

As a newly licensed motor vehicle dealer you will need to use the following sites to maintain your business:

• Dealer Registration Transfer (eTitle) login to https://livesite.adotdlrtransfer.com(link is external).  For additional information, the DRT User Handbook, FAQs and tutorial are available on the Dealer Licensing website.

• ADOT Force - Adot.force.com(link is external) is the site used to make changes to the dealership such as requesting new plates, replacement plates, canceling plates, changing locations or owners, etc.

• AZ MVD Now Dealer account is where funds are added, dealer license renewal, dealer TRP and permit issuance, as well as other dealer applications.

• Forms required by ALL dealers - the Audit Report(link is external) and the Dealer Plate Audit