How much will my North Carolina auto dealer bond cost?
North Carolina motor vehicle dealer bonds are required by the North Carolina Division of Motor Vehicles and must be in the amount of $50,000.
The amount a car dealer will pay for a surety bond is subject to underwriting and depends on a soft review of his or her credit report. Highly qualified applicants are typically approved for just 1-3% of their bond amount.
Auto dealers in North Carolina must post an additional $25,000 bond for each subsequent business location.
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Why do I need this bond?
By posting this surety bond, principals (vehicle dealers) guarantee that they will comply with not only all local, state and federal laws but also tax and judgment guidelines pertaining to North Carolina auto dealers. If the dealer or any of his or her employees commit fraud or other unlawful or unethical acts while on the job, the surety bond will protect all harmed parties from financial loss up to the full penal sum of the bond. Prohibited acts under this bond include:
- failing to comply with Articles 12 and 15 of Chapter 20 of the North Carolina General Statutes
- failing to have an established salesroom
- intentionally defrauding any retail buyer
- employing fraudulent devices, methods or practices
- using unfair methods of competition
- knowingly advertising any statement that is untrue, misleading or deceptive
- knowingly advertising a used motor vehicle for sale as a new motor vehicle
- knowingly giving an incorrect certificate of title or failing to give a certificate of title to a purchaser after a vehicle is sold
Our bond experts are here to answer any questions you have about motor vehicle dealer bonds in North Carolina. Simply submit a bond request to connect with a surety specialist today!
What’s the fine print?
North Carolina auto dealer bonds cannot be canceled by the surety unless one of the following happens:
- the auto dealer has ceased business operations or his or her business license has been suspended or revoked
- the auto dealer has failed to pay his or her surety bond premium
- the auto dealer or one of his or her employees commits an act of misrepresentation or nondisclosure when obtaining or renewing the surety bond
The surety can cancel this bond upon giving written notice to the Commissioner of Motor Vehicles at least 30 days prior to the desired date of termination.
The applicant must indicate on the bond form if he or she is a new or used car dealer as well as how many secondary locations he or she operates. An additional $25,000 will be added to the total required bond amount for each subsequent secondary location.
How to become an auto dealer in North Carolina
It is illegal for a person to act as a motor vehicle dealer in the state of North Carolina without being legally licensed to do so. Prospective dealers must obtain a license issued by the Department. Applicants must:
- pay the required application fees
- complete all required hours of educational courses
- provide proof of a sales tax license
- be at least 18 years of age
- furnish a credit report and a background check
- submit all required license application forms
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