This is a difficult question to answer as surety bonds are not one-size-fits-all financial instruments.  Surety bonds are paid for on an annual basis as a percentage of the total bond amount.  Applicants typically pay one lump sum up front for an entire year’s worth of bond coverage.  Prices of most license and permit bonds usually range somewhere between 1-15% of the bond amount.  For example, if you get approved at a 3% rate for a $10,000 Alabama Auto Dealer Bond, that means you must pay $300 per year for your bond.

 

HOW ARE BOND PRICES DETERMINED?

Most types of license bonds are underwritten based solely on the owner’s personal credit score.  However, credit doesn’t always paint the entire picture.  The following information can help determine what a surety bond costs:

SURETY BOND UNDERWRITING

As you can see, bond quotes aren’t randomly offered based on subjective reasons. Surety companies establish specific underwriting guidelines for different bond types in each state. These guidelines demonstrate their risk tolerance based on historical data gathered on past losses from claim activity.

As for-profit businesses, surety companies obviously do not want to bond someone likely to cause a financial loss for their company. Over time, bonding companies have found a direct relationship between a business owner’s personal credit and paid bond claims. Credit is an indication of a person’s ability to pay their debt on time, or an inability to do so. This does not mean that someone with bad credit cannot get approved for a bond, however, the price they pay may be higher than for someone with stellar credit.

 

LICENSE BOND COST CHART

Below is a grid that shows annual premium at rates ranging from 1-15% of the bond amount.  Line up the bond amount with a respective rate to see what the price of the surety bond will be.  Please note, this grid does not take into account extended term lengths, required expirations dates, or any state-mandated taxes, etc. 

*Bond Amount listed in GREEN
*Bond Rate listed in BLUE

  $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000
1% $100 $150 $200 $250 $300 $350 $400 $450 $500
2% $200 $300 $400 $500 $600 $700 $800 $900 $1,000
3% $300 $450 $600 $750 $900 $1,050 $1,200 $1,350 $1,500
4% $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000
5% $500 $750 $1,000 $1,250 $1,500 $1,750 $2,000 $2,250 $2,500
6% $600 $900 $1,200 $1,500 $1,800 $2,100 $2,400 $2,700 $3,000
7% $700 $1,050 $1,400 $1,750 $2,100 $2,450 $2,800 $3,150 $3,500
8% $800 $1,200 $1,600 $2,000 $2,400 $2,800 $3,200 $3,600 $4,000
9% $900 $1,350 $1,800 $2,250 $2,700 $3,150 $3,600 $4,050 $4,500
10% $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 $5,000
11% $1,100 $1,650 $2,200 $2,750 $3,300 $3,850 $4,400 $4,950 $5,500
12% $1,200 $1,800 $2,400 $3,000 $3,600 $4,200 $4,800 $5,400 $6,000
13% $1,300 $1,950 $2,600 $3,250 $3,900 $4,550 $5,200 $5,850 $6,500
14% $1,400 $2,100 $2,800 $3,500 $4,200 $4,900 $5,600 $6,300 $7,000
15% $1,500 $2,250 $3,000 $3,750 $4,500 $5,250 $6,000 $6,750 $7,500


FREQUENTLY ASKED QUESTIONS

How much does a $10,000 bond cost?

Standard Market Rates: $100 to $300 per year.

Non-Standard Rates: $400 to $1,500 per year.

How much does a $20,000 bond cost?

Standard Market Rates: $200 to $600 per year.

Non-Standard Rates: $800 to $3,000 per year.

How much does a $25,000 bond cost?

Standard Market Rates: $250 to $750 per year.

Non-Standard Rates: $1,000 to $3,750 per year.

How much does a $30,000 bond cost?

Standard Market Rates: $300 to $900 per year.

Non-Standard Rates: 1,200 to $4,500 per year.

How much does a $35,000 bond cost?

Standard Market Rates: $350 to $1,050 per year.

Non-Standard Rates: $1,400 to $5,250 per year.

How much does a $40,000 bond cost?

Standard Market Rates: $400 to $1,200 per year.

Non-Standard Rates: $1,600 to $6,000 per year.

How much does a $50,000 bond cost?

Standard Market Rates: $500 to $1,500 per year.

Non-Standard Rates: $2,000 to $7,500 per year.