Individuals in Arizona who are interested in starting a business to wholesale motor vehicles to dealers must first obtain a surety bond. This type of bond is required by the laws of the state to protect consumers from fraud. Read the frequently asked questions below to learn important information about obtaining a motor vehicle wholesaler bond in Arizona.
Is it a requirement for wholesalers in Arizona to obtain a motor vehicle surety bond?
According to Arizona law, all motor vehicle wholesalers are required to purchase a surety bond in the amount of $25,000. Prior to obtaining the bond, wholesalers must first acquire a license from the Arizona Department of Transportation. License qualifications include proof of a sound business, a background check, and business insurance.
Why must wholesalers of motor vehicles purchase a surety bond?
Surety bonds are a requirement for various types of individuals including contractors, mortgage brokers, and vehicle wholesalers. A surety bond is needed to protect those who conduct business with these individuals. Business dealings can often turn bad due to unlawful business practices, mismanagement and other incidents in which the business transaction doesn’t materialize.
Since large sums of money are often at stake, there must be a safeguard in place to protect individuals from losing their money. Possessing a surety bond is also helpful for vehicle wholesalers because this document shows they’re reliable and trustworthy.
Where does a wholesaler of motor vehicles purchase a surety bond?
Business owners who run a surety bond agency can supply individuals with a motor vehicle wholesaler bond in Arizona. Individuals will be responsible for paying all licensing fees, filing fees and other costs associated with purchasing a bond before they can obtain the bond.
The cost of the bond can vary and the price that each person pays is assessed by several factors, including the individual’s past financial reports and current credit score. Before purchasing the bond, individuals should look for a company that has experience in the surety bond business.
Wholesalers of motor vehicles in Arizona who need a surety bond can contact Southwest Bond Services. This locally owned-and-operated agency provides various types of surety bonds including contract bonds, license and permit bonds, fidelity bonds and court bonds.
