Alabama dismantlers and parts recyclers are required by the state to get a license and surety bond. Keep reading to learn how the process works.
How to get an auto dismantler and parts recycler license
Auto dismantlers and parts recyclers are any entity (individual or business) that possesses 10 or more inoperable vehicles for more than 30 days. The definition does not include businesses holding vehicles that are waiting on repairs, or licensed junk dealers holding the vehicles for scrap metal. It also excludes anyone holding or repairing vehicles for their own personal use.
Prior to September 1, 2017, auto dismantlers and parts recyclers were licensed by the Business & License Tax Division of the Alabama Department of Revenue. Those licenses are now issued by the Department’s Motor Vehicle Division. Applicants apply through the Motor Vehicle Regulatory License Portal, and this is some of the information they need to provide:
- Applicant’s name and address of business
- Type of business organization
- Sales tax number
- NMVTIS number
- $225 fee
- $25,000 surety bond
Licenses expire each year on October 1, and licensees have 30 days to renew without penalty. After that, a 15% penalty and interest are charged. Dismantlers and parts recyclers also need to keep records of all transactions for five years afterward. Records need to record the vehicle’s make, model, body style, year, and VIN, as well as the name and address of the buyer.
Auto dismantlers and parts recyclers need to obtain Buyer’s�Identification (BIN) cards so that licensees and their employees can make purchases at salvage pools or disposal sales. BIN cards are $10 each and licensees can purchase three per license year.
Dismantler and recycler surety bonds
Parts dismantlers’ and recyclers’ surety bonds are their promise to the state and to customers that they will follow the rules for their license laid out inAlabama Code��40-12-410 through��40-12-425, plus any other applicable laws. If the licensee does not follow those rules, and they cause financial harm to a customer, the customer can file a claim against the surety bond. The bond also removes liability from the state, placing it on the licensee. Applicants will gain access to the surety bond form after finishing their application in the online portal.
More questions about applying for this license? Contact the Alabama Motor Vehicle Division. Ready to get bonded? Get in touch with Single Source Insurance!