Alaska Auto Dealer Bond

An Alaska auto dealer bond, formally called a Motor Vehicle Dealer Bond is a surety bond required by the Alaska Department of Motor Vehicles before your dealership license can be issued.

It is a financial guarantee that your dealership will operate in compliance with Alaska law and deal honestly with customers. If you fail to do so, a harmed customer can make a claim against your bond to recover their losses.

Unlike insurance, which protects you, a surety bond primarily protects your customers and the state. If a valid claim is paid out, you are responsible for reimbursing the surety company.

Every surety is a contract between 3 parties:

• The Obligee: Alaska Department of Motor Vehicles
  The state authority that requires the bond as a condition of licensing. They set the bond amount and terms.
   
• The Principal: You, the dealer
  You purchase the bond and are bound by its terms. If a valid claim is paid, you must reimburse the surety.
   
• The Surety: such as Lance Surety Bonds
  We underwrite the bond and guarantee payment to claimants up to the bond amount if you default on your obligations.

1. Submit Your Bond Application

You can apply for your bond online. Just enter some basic information about yourself and your business, and you should be able to submit your application within a matter of minutes. If you have any questions, we are more than happy to assist you.

2. Get a Quote

At Lance Surety Bonds, we want to provide you with the best premium rate possible. For most applicants with a strong credit history, a quote is ready within minutes. More complex applications may take up to 24 hours.

3. Purchase Your Bond

Once you receive your quote, you can pay the bond premium and you’re officially bonded in Alaska. You’ll receive an email copy of the bond, and you can request a paper copy if necessary.

4. File your bond with the Driver and Vehicle Services

Submit your bond as part of your dealer license application to the Alaska Department of Motor Vehicles.

Filing address:

Alaska Department of Motor Vehicles, Attn: Dealer Services 4001 Ingra Street, Suite 101

Anchorage, AK 99503

The Alaska Department of Motor Vehicles requires all of the following to post a surety bond before receiving a license.

• Motor vehicle dealers - New and used vehicle dealers, including franchise dealers. Selling new, used, or wholesale? A $100,000 bond is required regardless.
• Powersports dealers - ATVs, dirt bikes, snowmobiles and other power sports vehicles fall under the same requirement — a $100,000 bond applies.
• Wholesalers - Wholesale dealers must each carry a $100,000 bond, regardless of whether selling to the public.
• Motorcycle-only dealers - Dealers who sell exclusively motorcycles qualify for a reduced $25,000 bond. This exception does not apply if you sell any other vehicle type 

The bond protects consumers from financial loss caused by dealer fraud or negligence. A claim can be filed for any of the following violations:

• Selling a vehicle with no title, a fake title, or failing to transfer the title properly
• Misrepresenting a vehicle’s condition, accident history, or mileage
• Retaining customer deposits without delivering the vehicle
• Failing to record vehicle sales or pay the correct amount of sales tax
• Any other breach of the Alaska Motor Vehicle Dealer Law

The maximum payout per bond is the bond’s penal sum: $100,000 for most dealer licenses. After any payout, you as the principal are liable to reimburse the surety.

How the Claims Process Works

• Consumer or claimant contacts the surety company directly to file a claim
• The surety investigates the claim to determine its validity
• If the claim is valid, the surety pays the claimant up to the bond's penal sum ($100,000)
• The dealer (principal) is then required to reimburse the surety for any amounts paid out
• Claims on your record will significantly increase your bond premium at renewal

Alaska auto dealer licenses are valid for 12 months from the date of approval, and your bond must be renewed alongside your license.

Lance Surety will contact you well in advance of your renewal date to help prevent any lapse in coverage. There is a 30-day grace period for the bond cancellation notice, but you should maintain continuous coverage.

Alaska dealer bonds are issued on a continuous basis, meaning the original bond remains active as long as the annual premium is paid. You typically won’t need to file a new bond each year unless you change surety providers.

At renewal, the surety company will review your credit. Maintaining a strong credit profile can help keep your premium costs low.

Getting an Alaska auto dealer license requires submitting a complete application to the Alaska Department of Motor Vehicles. A dealer license is required for anyone who sells five or more vehicles per year in Alaska, including used vehicles.

You can find the full checklist on the Alaska Department of Motor Vehicles’ website.

For more information on how to get the licence, check our guide: Alaska auto dealer license

How long does it take to get an Alaska dealer bond?

For most applicants, bonds are issued the same day, often within minutes of completing the application. Your bond is delivered digitally by email. The Alaska Department of Motor Vehicles accepts a scanned or photocopied bond, so you can file it immediately. If you need a paper original, we’ll mail it to you.

What is the difference between the bond amount and the bond premium?

The bond amount (also called the penal sum) is the maximum protection offered to consumers, $100,000 for most Alaska dealer licenses. This is not what you pay. The bond premium is the annual cost you pay to purchase the bond, which is a percentage of the bond amount, typically 1–10% depending on your credit. So a $100,000 bond costs $1,000–$3,000 per year for applicants with good credit.

What happens if my bond lapses?

If your bond lapses, you are no longer in compliance with Alaska Motor Vehicle Dealer Law and cannot legally sell vehicles. The Alaska Department of Motor Vehicles can suspend or revoke your dealer license for operating without an active bond. You must provide a new bond before the cancellation effective date — reinstatement can be a lengthy process and may require reapplying for your license from scratch.

Can my bond be cancelled?

Yes, a surety bond can be cancelled, either by you or by the surety company. If the surety cancels your bond (typically due to non-payment or a significant change in your risk profile), they are required to give advance written notice to both you and the obligee. Once your bond is cancelled, your dealer license is no longer valid. If you need to cancel your bond voluntarily — for example, because you’re closing your dealership — contact us directly to handle it properly and avoid any penalties.

Does Alaska require a bond for motorcycle-only dealers?

Yes. Alaska requires a separate $25,000 surety bond for dealers who sell motorcycles exclusively. This reduced bond amount applies only if the dealership sells no other vehicle types. If you sell any additional vehicle types alongside motorcycles, the full $100,000 bond requirement applies.

Do I need a separate bond for each dealership location?

Generally yes. Each licensed dealership location in Alaska requires its own bond. If you operate multiple locations under separate dealer licenses, each license needs a bond attached to it. Contact us if you operate multiple locations, we can help you manage bonding across all of them efficiently.