The Alaska DMV mandates that licensed vehicle dealers hold an auto dealer bond of $100,000 to ensure consumer protection against unethical auto dealer practices. Motorcycle dealers are required to have a $25,000 bond. The annual premiums for these bonds begin at $450 for auto dealers and $125 for motorcycle dealers.
The price of an Alaska motor vehicle dealer bond typically ranges from 0.6% to 10% of the required bond amount. It is influenced by several factors, including the applicant's credit score, dealer experience, and the insurance company providing the bond. Your credit score is the most significant among these factors. A higher credit score and a positive credit history can lead to a lower bond cost. For instance, our one-year, $100,000 Alaska auto dealer bond starts at just $450.
We offer multi-year discounts to those purchasing a bond for longer than one year. Additionally, we have established partnerships with over 10 insurance carriers, so that we can get the best rate for our clients. If you find a better rate elsewhere, let us know and we’ll do our best to beat it.
An Alaska motor vehicle dealer bond operates as a three party agreement involving the surety company (referred to as the "surety"), the dealer (who acts as the principal of the bond), and the Alaska Department of Administration Division of Motor Vehicles (known as the "obligee"). This bond guarantees that the dealer will adhere to the stipulations outlined in Alaska Statutes, Title 8, Chapter 66, as mandated by the obligee. Should the dealer fail to fulfill their obligations according to the law, a claim may be filed against the bond.
If the claim turns out to be accurate, the surety company will pay for the claim, but only up to the highest amount mentioned in the bond agreement. But, it's essential to understand that the dealer has to pay back all the money the surety company paid out. This way, the bond helps protect the people who made the claim and the public from financial losses if the dealer doesn't follow the rules.
Under the Alaska Statutes, Title 8, Chapter 66, any person who sells motor vehicles or recreational vehicles as a dealer, wholesaler, or distributor must obtain the relevant motor vehicle dealer license from the Alaska Department of Administration Division of Motor Vehicles. To obtain the license, you need an Alaska motor vehicle surety bond. The most common bond is a $100,000 motor vehicle dealer bond, which starts at $450 per year.
A soft credit check is required for an Alaska Motor Vehicle Dealer Bond. Surety companies rely on credit scores to assess the risk of an applicant not fulfilling their bond obligations in case of a claim. The bond's cost increases if there's a greater chance of not meeting those obligations. If an applicant's credit score is below 550, they may have to be shopped around with multiple carriers to find a suitable quote.
Getting your Alaska motor vehicle dealer surety bond is straightforward. Begin by filling out the form, providing essential information such as the dealer's name, any applicable Doing Business As (DBA), dealer address, and dealer owner's legal name and Social Security Number (SSN) (note that a soft credit check is required).
Once we receive this information, we will leverage our relationships with more than ten insurance partners to find the most affordable quotes for you. We will promptly send you a payment link if you are satisfied with the quote. Once payment is made, we will promptly email you the bond.
Motor vehicle dealers in Alaska must renew their motor vehicle dealer bond every two years. The state will send you reminders before your bond expires. However, it is crucial to adhere to renewal requirements to avoid penalties associated with an invalid bond. We also prioritize customer service and will contact you about 60 days before your bond expires to ensure it remains active.
To avoid claims on your Alaska motor vehicle dealer bond, follow the rules set by Alaska's laws. If someone files a claim against your bond, the bonding company will investigate whether it's valid. If it is valid, you'll need to repay the bonding company for the money they gave to the people making the claim. Staying in line with Alaska's legal requirements lowers the chances of claims and builds trust and a good reputation in your community and among customers. Sticking to these rules is crucial for protecting your dealership's image and financial stability and ensuring it operates within the law.
