Wholesale Motor Vehicle Dealer ($25,000) Bond - Statewide in Arizona

Brief Summary

Arizona's wholesale dealer bond is $25,000, a quarter of what a used dealer posts, because you sell only to other licensed dealers. The catch is that ADOT wants a separate original bond for each county where you keep a place of business. Get the county count right up front and the filing goes through the first time.

Arizona Administrative Code R17-5-402 sets the bond for a wholesale motor vehicle dealer at $25,000. ADOT requires a separate original bond for each application and for each county where the licensee has an established or principal place of business, on the director's prescribed form. Under A.R.S. 28-4301 a wholesale dealer sells used motor vehicles only to licensed motor vehicle dealers. The bond covers unpaid title and registration fees or taxes and failure to deliver a clear title, and it can be cancelled only on at least 60 days' notice to the director.

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How to Apply for a Wholesale Motor Vehicle Dealer ($25,000) Bond:

• Count the Arizona counties where you will have an established or principal place of business, since each needs its own original bond.
• Use the exact legal name and business address shown on your ADOT MVD dealer application.
• Provide owner information for the surety's underwriting review and accept the quoted premium.
• Have the surety issue the $25,000 bond on the director's prescribed form with the embossed seal.
• Submit the original bond with your wholesale dealer license application to ADOT MVD Dealer Licensing.
• Complete fingerprinting for each owner of 20 percent or more and any education ADOT requires.

Detailed Information About the Arizona Wholesale Motor Vehicle Dealer ($25,000) Bond:

One bond per county, not one per company

The amount is the easy part. R17-5-402 requires a separate original bond for each application and for each county in which the applicant or licensee has an established place of business or a principal place of business. A wholesaler with yards in two counties needs two bonds. The bond must be on the director's prescribed form and carry the bond company's embossed stamp or seal, and handwritten bonds are not accepted.

Where $25,000 fits in Arizona's schedule

A.R.S. 28-4362 lets the director set dealer bond amounts up to $100,000, with at least $20,000 for an automotive recycler. R17-5-402 sets them by license type:

• New motor vehicle dealer, used motor vehicle dealer and public consignment auction dealer: $100,000
• Broker, wholesale motor vehicle dealer and wholesale motor vehicle auction dealer: $25,000
• Automotive recycler: $20,000

The lower wholesale figure comes with a limit. A.R.S. 28-4301 defines a wholesale motor vehicle dealer as a person who sells used motor vehicles only to licensed motor vehicle dealers. If you plan to sell to anyone else, settle the right license type with ADOT before you apply.

What the bond covers

Under A.R.S. 28-4362 the bond protects a person who suffers loss because the dealer did not pay customer prepaid title, registration or related fees or taxes, or did not deliver a valid title free of prior owners' interests and liens with the sale of a vehicle. It must be written by a surety company authorized in Arizona and can be cancelled only on at least 60 days' prior notice to the director.

Other parts of the application

A.R.S. 28-4361 allows the director to set education and training for applicants for an initial or renewal used or wholesale dealer license, and requires fingerprints for a criminal records check from owners of 20 percent or more. A.R.S. 28-4302 sets a $15 fee for filing a wholesale dealer license application and a $100 license fee when the license is issued annually. Confirm the current training requirement and filing steps with ADOT MVD Dealer Licensing before the bond is issued.

Eligibility and Requirements for a Arizona Wholesale Motor Vehicle Dealer ($25,000) Bond:

• Bond amount of $25,000 under Ariz. Admin. Code R17-5-402.
• Separate original bond for each application and each county with a place of business.
• Surety company authorized to do business in Arizona.
• Director's prescribed bond form with embossed stamp or seal, not handwritten.
• Cancellable only on at least 60 days' prior notice to the director.

Arizona Wholesale Motor Vehicle Dealer ($25,000) Bond FAQs:

Official and Additional Resources for the Arizona Wholesale Motor Vehicle Dealer ($25,000) Bond: