Businesses that set themselves up as motor vehicle wholesalers in Phoenix need to be bonded. Arizona has several requirements that these businesses need to meet, and some definitions they need to know.
Which types of businesses need bonds?
The following types of businesses need surety bonds:
1. Any retail business that sells new and used vehicles
2. Automotive recyclers
3. Title service companies
What requirements do businesses have to meet?
Requirements vary slightly depending on the type of automotive business. Arizona law requires that any business that sells new and used vehicles or public consignment auction dealers require a $100,000 bond. Automotive recyclers require a $20,000 bond. Brokers, wholesale auction dealers, wholesale motor vehicle dealers, and title companies require a $25,000 bond. If the business has branches in more than one county, they’ll need to fill out an application and post a surety bond for each.
What does it protect against?
Surety bonds guarantee that the business complies with Arizona’s rules and regulations about transportation. It protects potential customers from damages that may arise if the business doesn’t pay tax, title, or other fees, or doesn’t deliver a valid vehicle title that’s free and clear of the previous owner’s interest and liens, except for those that are assumed by the buyer of t he vehicle.
What do automotive companies need to do to obtain their license?
They need to meet these basic requirements:
1. The owner and all partners in the business need to sign the application. If the company is a corporation, an officer of the corporation needs to sign it.
2. A personal history form and fingerprint card needs to be provided so a records check can be done.
3. The surety bond needs to be submitted.
4. All fees need to be paid.
5. Copies of Buy/Sell agreements need to be submitted.
6. Set business hours need to be established
7. State signage requirements need to be met.
These are the questions that automotive companies ask most often about Motor Vehicle Wholesaler Bonds in Phoenix. Whether a business chooses to obtain their bond through Southwest Bond Services or another company, if they know the answers to these questions they will be better prepared when they obtain their surety bond and license.
