Surety Bond Professionals is a family owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your Alaska auto dealer bond needs. Learn how to get an Alaska car dealer license, and contact us today to request a quote on the bond you need.
What Are the Different Types of Alaska Auto Dealer Licenses?
Alaska’s Division of Motor Vehicles (DMV) issues only one type of auto dealer license, regardless of the types of vehicles sold. You’ll need to obtain an Alaska auto dealer license if you plan to sell more than five vehicles in a 12-month period.
What Are the Steps in the Licensing Process?
The licensing process is fairly straightforward:
- Download the auto dealer license application and fill it out completely. The application must be notarized before submission.
- Purchase a $100,000 Alaska auto dealer license bond ($25,000 if the only vehicles you will sell are motorcycles).
- Obtain a business license designated as “LOB 42: Trade.”
- Complete a Dealer Plate application if necessary.
- Attach the bond and business license and submit all of the above, along with:
- A photograph of each owner, partner, corporate officer, or member
- A photo of the business location
- Proof of liability insurance and workers’ compensation insurance
The application package must be submitted to the Vehicle Services Department at the Anchorage DMV office.
Why is an Alaska Auto Dealer Bond Required?
An Alaska auto dealer bond is the dealer’s pledge to operate in compliance with all applicable state laws and provides a way to compensate consumers for damages caused by the dealer’s unlawful or unethical actions. Any such violation of the terms of the surety bond agreement gives the injured party the right to file a claim against the dealer’s bond.
How Are Alaska Auto Dealer Bond Claims Paid?
There are three parties to the surety bond agreement for an Alaska auto dealer bond: the “obligee” (the Alaska DMV), the “principal” (the auto dealer), and the “surety” (the company guaranteeing the bond). The agreement, which is a legally binding contract, makes the principal solely responsible for paying claims against the bond.
When a claim is received, the surety will investigate to make sure that it’s valid and should be paid. Then, unless the principal pays it promptly, the surety will pay a valid claim on behalf of the principal. That payment represents credit extended to the principal, which the principal is legally obligated to repay to the surety.
How Much Does an Alaska Auto Dealer Bond Cost?
The premium for an Alaska auto dealer bond is a small percentage of the required bond amount, also known as the bond’s “penal sum.” The surety determines what that percentage (the premium rate) will be based on the underwriters’ assessment of the principal’s creditworthiness.
A high personal credit score suggests a lower risk of the principal not repaying the surety for claims paid on the principal’s behalf. Consequently, the premium rate will be low, as low as one percent. The lower the principal’s personal credit score, the higher the premium rate will be.
Our surety bond professionals will get you the Alaska auto dealer bond you need at a competitive rate.