How much does an auto dealer bond cost in North Dakota?
Auto dealer surety bonds (also called motor vehicle dealer bonds) are mandated by the North Dakota Department of Transportation Motor Vehicle Division as part of the licensing requirements for dealerships to conduct business in the state. The Motor Vehicle Division sets the total bond amount at $25,000.
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 Dakota auto 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 Dakota auto dealer bond. EZSurety still offers competitive rates to individuals with low credit scores or other financial issues.
Why are auto dealer bonds important in North Dakota?
North Dakota auto dealer bonds provide protection for customers, creditors, and the state government. When a North Dakota motor vehicle dealer posts a surety bond, they provide a guarantee to the bond’s Obligee (the MVD) that they will conduct business in compliance with the conditions listed in Title 39 of the North Dakota Century Code.
If the auto dealer fails to comply with the code, 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 Dakota
To obtain your auto dealer license in North Dakota, you must meet the North Dakota Department of Transportation licensing requirements by completing the following steps:
- Complete the dealer license application
- Post the $25,000 surety bond
- Provide proof of liability insurance
- Have a commercial lot of at least 2,5000 sq. ft.
- Install the required signage at the established place of business
- Keep all business records in a single location
- Pay all application and licensing fees