How much does an auto dealer bond cost in North Carolina?
Auto dealer surety bonds (also called motor vehicle dealer bonds) are mandated by the North Carolina Division of Motor Vehicles (DMV) and License and Theft Bureau as part of the licensing requirements for motor vehicle dealerships, manufacturers, factory branches, distributors, and wholesalers to conduct business in the state. The Division of Motor Vehicles sets the total bond amount at $50,000.
The surety company determines your premium rate, which is the percentage of the total bond amount you pay as the premium. Premium rates for North Carolina car dealer bonds typically cost between 1% and 3% of the total bond amount.
During the application process, the surety company evaluates your personal credit, financial statements, industry experience, and licensing history. Applicants with good credit generally receive the lowest rates, however, bad credit will not prevent you from securing a North Carolina auto dealer bond. EZSurety still offers competitive rates to individuals with low credit scores or other financial issues.
Below are the lowest premiums EZ Surety has issued for auto dealer surety bonds in the State of North Carolina.
- EZ Surety has issued motor vehicle dealer bonds for premiums as low as $250.
Why are auto dealer bonds important in North Carolina?
North Carolina auto dealer bonds provide protection for customers, creditors, and the state government. When a North Carolina motor vehicle dealer posts a surety bond, they provide a guarantee to the bond’s Obligee (the North Carolina DMV) that they will conduct business in compliance with the conditions listed in Articles 12 and 15 of Chapter 20, North Carolina General Statutes.
If the auto dealer fails to comply with the statutes, the surety company will pay out financial losses to damaged parties up to the full bond amount. The auto dealer is liable to reimburse the surety for any damages paid under the bond.
How to get your auto dealer license in North Carolina
To obtain your auto dealer license in North Carolina, you must meet the North Carolina DMV licensing requirements by completing the following steps:
- Submit the application for a new dealer license
- Complete a record of inspection to prove the business location meets all requirements
- Post a $50,000 surety bond for the primary business location and $25,000 for each supplemental dealership location
- Submit a copy of the first page of the corporate charter
- Submit the policy number for your comprehensive liability insurance coverage
- Provide proof the business filed an assumed name with the Register of Deeds (if applicable)
- Complete a dealer education course
- Pay all license and application fees