To calculate your premium, multiply your premium rate by the bond amount. The better your credit, the lower your rate and, therefore, the less you pay for your bond. Your premium rate-usually ranging from 1-3%- is primarily based on your credit. We call this percentage your premium rate. The premium is usually a percentage of your bond amount. What you pay for your bond is your premium. So, let’s take a minute to understand why… This change will likely double your current premium. Not only will you need to get the new Master Dealer License, but you’ll need to increase your surety bond amount from $25,000 to $50,000. The Obligee will pre-fill out the bond form and then provide it to you after you apply for your renewal.Īs if that wasn’t enough to worry about, the bond amount increase will also change how much you pay. Not only that, but the Obligee now requires the bond to be written on a new bond form. As a result, your current surety bond will need to be canceled and rewritten. Unfortunately, the Alabama Department of Revenue has made it abundantly clear that a rider- a change to the original bond-for the bond amount increase will not be accepted. Upon the renewal of your license, the renewal of your bond will be unlike the year before. Now-in addition to the new Master Dealer License-they will require a $50,000 surety bond. In the past, the Alabama Department of Revenue (the Obligee) required a $25,000 surety bond for motor vehicle dealers. A surety bond is a three-party contract between the Principal (you), the Obligee (the entity requiring you to get the bond), and the Surety (the insurance company who guarantees the bond). Understandably, surety bonds are something that cause many people confusion. I mean, nothing says ‘light reading’ like legislation… right? We also want you to understand what these changes mean for your bond. While we can’t force you, we do encourage you to read the entire bill to be fully aware of any changes that may affect you. Those that meet the license requirements who fail to obtain the Master Dealer License will be subject to a $500 penalty for the first violation and $1000 for any subsequent violations.When a standard plate is issued for a motor vehicle held in inventory by a licensed new or used motor vehicle dealer, there will be no motor vehicle ad valorem taxes or sales tax collected by the local issuing official.New or used motor vehicle dealers who complete applications for certificates of title involving title transfers for at least 300 motor vehicles in this state during the previous licensed year may purchase a combined maximum total of 25 additional dealer and motorcycle dealer license plates.The number of total combined dealer and motorcycle dealer license plates that USED motor vehicle dealers can purchase has decreased from 10 to 5.The number of total combined dealer and motorcycle dealer license plates that NEW motor vehicle dealers can purchase has increased from 25 to 35.The required surety bond amount has been increased from $25,000 to $50,000.There will be a 30-day grace period for licenses not renewed by Oct.The Alabama Master Dealer license will be valid for a 1-year term, renewing October 1st of each year.We took the time to read the entirety of HB393, so we could highlight the most important changes. What Else Changes With The Master Dealer License?
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