Arizona MVD Bond

Arizona MVD Bond

Arizona MVD Bond Requirements and Information:


Apply »

All states have their own unique requirements when it comes to motor vehicle dealer (MVD) bonds. In the state of Arizona, an Arizona MVD bond is required by the The Motor Vehicle Department to obtain a Dealer license.

 MVD bonds can also be referred to as:

            Auto dealer bond

     Car dealer bond

     Used car dealer bond

     Dealer bond

     DMV bond

     Bond for dealer’s license

     Motor vehicle bond

 If you own an Arizona car dealership, read on to learn more about how Arizona MVD bonds work, how to get one, and what to expect cost-wise.

Arizona MVD Bond Definition

MVD bonds exist to legally require that automotive dealers remain compliant. An Arizona MVD bond is the specific type of MVD bond required by the state of Arizona. MVD bonds in general can give consumers peace of mind that the dealership they’re shopping at is licensed and follows the law. 

 In Arizona, the MVD bond amount for both used and new vehicles is set at $100,000 and this bond ensures that the dealer will comply with the conditions of any contract made by a licensee in connection with the sale or exchange of any motor vehicle and that the dealer won’t violate any of the provisions of law relating to the conduct of the business for which it is licensed.

 In Arizona, you must hold a dealer bond for each license you hold.

            $100,000 surety bond for new and used motor vehicle dealers and public consignment auction dealers

     $20,000 surety bond for automotive recyclers

     $25,000 surety bond for brokers, wholesale auction dealers, wholesale motor vehicle dealers, and title service companies

 An Arizona MVD bond protects consumers from shady business practices like:

            Misrepresenting the condition of a vehicle

     Falsifying or omitting details on the repair or accident history of the vehicle

     Issuing a fraudulent certificate of title

     Failing to pay the required motor vehicle fees (like the title or registration)

     Selling a car that is clear of the prior owner’s interest and liens

     Not following the required tax laws

     Selling a stolen vehicle

     Not fulfilling a warranty

     Not reporting the sale of a vehicle

 There are three parties involved in the issuing of an Arizona MVD bond:

            Principal. This is the automotive dealer and they are the one who buys the MVD bond.

     Obligee. The obligee is who requires dealerships to obtain the bond—usually this is a government agency.

     Surety. The surety is the bond company that issues the MVD bond and guarantees to the obligee that the principal will comply with all MVD bond requirements. 

Example of an Arizona MVD Bond

Let’s look at how an Arizona  MVD bond can work. Tommy is a recent college graduate and needs to buy his first car so he can commute to his new job. He can’t afford a new car just yet, so he stops by a used car dealership near his house in Phoenix to buy a used sedan.

 Everything seems great until Tommy is driving to work the next week and his car breaks down, which leads to Tommy being in an accident. How did the car break down so soon? Well, it looks like the used car dealer didn’t properly test the car’s safety. Now Tommy needs to file a claim against the dealer’s Arizona MVD bond to cover the costs of repairs, medical bills, and any damages incurred during the accident. Because the Arizona MVD bond amount is set at $100,000, Tommy can file a claim up to that amount.

What to Keep in Mind When Shopping for an Arizona MVD Bond

If you need an Arizona MVD bond in order to run your dealership business, you should compare the bonding capacity, premium, and term of each bond you consider while shopping around.

            Bonding capacity. The bonding capacity, also known as the bonding amount, represents the highest amount an individual can claim if the principal is found to have done                      something wrong. For example, if the maximum bonding capacity is $75,000, that is the highest amount the bond would cover in losses and damages. The maximum bonding                capacity varies depending on which state you operate in. In Arizona, the bonding capacity amount is set at $100,000.

     Bond premium. The amount the bond premium is, is how much you’ll spend to purchase an MVD bond. Usually, MVD bonds cost between 1% and 10% of the bond amount. That means in the great state of Arizona, you can expect to spend $1,000 to $10,000 on an MVD bond, because the bonding capacity is $100,000.

     Bond term. While it varies on a state to state basis, most bond terms only last a year and you have to renew them annually (so budget accordingly).

 Apply online for an Arizona MVD bond today! Pricing starts at as low as $650 for qualified individuals!