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Alaska Motor Vehicle Dealer, Alaska Auto Dealer Bond:

The Alaska Motor Vehicle Dealer bond is a License Surety Bond that serves to protect Alaska's citizens by providing a path for recourse in situations where an Auto Dealer does not adhere to the laws, rules, and regulations as set in Alaska state legal statutes. An Alaska Motor Vehicle Dealer bond may be required as part of the Motor Vehicle Dealer licensing and/or vehicle registration process.

In Alaska, the required Motor Vehicle Dealer bond amounts are as follows:

• Alaska, New Motor Vehicle Dealer bond requirement - $50,000 Surety Bond
• Alaska, Motorcycle Only Dealer bond - $25,000 Surety Bond

You should always check with the Alaska Department of Administration Division of Motor Vehicles, or requesting agency, for the most current required Alaska Motor Vehicle Dealer bond amount as well as the required bond forms.

How to Get an Auto Dealer Bond in Alaska?

Before you start applying, take some time to learn how an Alaska auto dealer surety bond actually works. In the event that a claim against the bond is filed, it helps to understand who and what is involved. All bond agreements are between three distinct parties:

• The obligee is who requires Alaska Auto dealers to get a bond before getting a license. In Alaska and most states, the obligee is whatever entity or agency has control over the states Roadways. In this particular instance, the obligee is the Alaska Department of Administration Division of Motor Vehicles.
• The principal is the entity who is responsible for obtaining and paying for the Alaska auto dealer bond. Said differently, the principal is whoever is subject to the authority of the obligee. If you are the one who needs to obtain a bond, you are the principal in the bond agreement.
• The surety takes responsibility for issuing the bond. If your dealership breaks Alaska state laws related to vehicle sales, the obligee (the state) could make a claim against the bond. The surety investigates the claim and pays it out (up to the bond limit) if it's valid. Then they collect the amount paid out from the principal (you). Ultimately, the principal is financially responsible, but the surety exists to ensure payment is prompt.

Once you feel comfortable with the concept of an Alaska motor vehicle surety bond, you're ready to apply for one. Most surety companies offer online applications, and the application process is not nearly as extensive as it could be for a loan or even an insurance agreement. The surety company can begin making its decision after you supply the following information:

• The type of bond you need and the exact amount
• Personal and financial information for everyone with 10% ownership or above when requested.
• Information about past surety bond agreements, if any.
• Some applicants may have to provide additional information.

The surety company will evaluate that information to decide how likely you are to compensate the company after it pays out a claim. Things like your credit score and financial history are taken into consideration when making a decision, however, having mistakes in your past does not mean a bond is unattainable. Risky principals may have to pay more than others, but in most cases, they can still get an Alaska auto dealer bond that satisfies the state's licensing requirements.

Why is it Important to Have a Bond?

Alaska requires all motor vehicle dealers to have a bond for a reason: to protect the interests of the public. Having unlawful vehicle sales in the state puts Alaskan cutomers at risk. In order to keep that from happening, the state makes it illegal for anyone to sell vehicles without a license. Additionally, in order to get a license, dealers must show they are committed to paying the penalties for unethical behavior by taking out a bond first. Another way to consider it is that surety bonds hold dealers responsible which helps to keep everyone honest.

Apply for an Alaska Auto Dealer Bond

writes Alaska Motor Vehicle Dealer bonds. We can assist both clients with good credit, and clients with bad credit. Typically, the worse the credit, the higher the surety bond premium will be. In either case, we always work to get the best quote for you. Viking has partnered with markets that welcome Alaska Motor Vehicle Dealer bond applications and provide competitive quotes for them.

(See Also: Cost Expectations for Auto Dealer Bonds)