Arizona MVD bonds, also known as Arizona Motor Vehicle Dealer Bonds, are types of surety bonds required by the Arizona Department of Transportation for individuals or businesses who want to become licensed motor vehicle dealers in the state. The bond provides a financial guarantee that the dealer will comply with state laws and regulations relating to the sale of motor vehicles, and will pay any necessary taxes and fees to the state. If the dealer fails to meet these obligations, the bond can be used to compensate any affected parties, such as customers or the state government. The required bond amount may vary depending on the specific license and dealership type, and must be obtained from a licensed surety bond provider.
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
(Also Wholesale Dealer and Salvage Dealer)
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.
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
● $25,000 surety bond for
brokers, wholesale auction dealers, wholesale motor vehicle dealers, and title
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
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
Selling a stolen vehicle
Not fulfilling a warranty
Not reporting the sale of a
● 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.
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.
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
● 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
Apply online for an Arizona MVD bond today! Pricing starts at as low as $650 for qualified individuals!