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North Carolina Motor Vehicle Dealer Bonds

What is a North Carolina Motor Vehicle Dealer Bond?

The North Carolina Division of Motor Vehicles requires that motor vehicle dealers, manufacturers, factory branches, distributors, and wholesalers in the state post a $50,000 corporate surety bond for the primary salesroom or business location. An additional surety bond in the amount of $25,000 must be posted for each secondary salesroom or place of business.

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Why is a North Carolina Motor Vehicle Dealer Bond Required?

The surety bond protects any purchaser of a motor vehicle who suffers any loss or damage due to the bonded individual’s failure to deliver free and clear title for any vehicle. The surety bond also a protects purchaser in the event of motor vehicle odometer alteration and other acts that constitute violations by a vehicle dealer as defined in Article 12 and 15 of Chapter 20, North Carolina General Statutes. Damaged parties have the right to institute action to recover against the license holder and surety company up to the full amount of the bond.

North Carolina motor vehicle surety bonds must remain in force for the full bond term. The bond may not be canceled by the surety company unless the bonded principal neglects to pay premium, commits an act of material misrepresentation, or ceases business activity. The bond may also be canceled if the license is denied, suspended or revoked under North Carolina General Statute 20-294. Initiation of cancelation requires 30 days advance written notice to the Commissioner.

Motor Vehicle Dealer Bonds And Getting Your North Carolina Business License/Registration

In North Carolina, any person, firm or corporation who through proper application to the Division meets the qualifications and requirements set forth in Article 12 of Chapter 20 of the North Carolina General Statutes, related statutes and regulations contained in Title 19A, Subchapter 3D, Section 0200 is eligible for motor vehicle dealer licensing in the state. The following is an overview of key North Carolina motor vehicle dealer licensing requirements.

  • An application on a form provided by the Division and contain the information required by the Division.
  • The required fee submitted with the application.
  • Proof that the applicant, within the last 12 months, has completed a 12-hour licensing course approved by the Division if the applicant is seeking an initial license and a six-hour course approved by the Division if the applicant is seeking a renewal license (when applicable).
  • If the applicant is an individual, proof that the applicant is at least 18 years of age and proof that all salespersons employed by the dealer are at least 18 years of age.
  • The application for a dealer license plate.
  • The corporate surety bond once applicant is approved for license.
  • Additional items may be needed and exact requirements may vary based on applicant, license type or obligee discretion. Please see obligee and state links in the Other Helpful Information and Links section below or contact the obligee directly for more information.

Once the completed license application is received as required by the North Carolina Dealers and Manufacturers Licensing Act, the Commissioner will initiate an investigation to determine whether the applicant meets the requirements of law for licensing as a motor vehicle dealer, manufacturer, factory branch, distributor, distributor branch, wholesaler, sales, factory, or distributor representative. This process includes the inspection of the proposed location, applications and other documents as mandated by an agent of the North Carolina License and Theft Bureau.

Additional North Carolina Motor Vehicle Dealer Bond Resources & Links


North Carolina General Statutes 20-288 Application for license; license requirements; expiration of license; bond

All those applying for license as a motor vehicle dealer, manufacturer, distributor, distributor branch, wholesaler or factory branch license in North Carolina must furnish a corporate surety bond, cash bond or fixed value equivalent in the amount of fifty thousand dollars for one established salesroom and twenty-five thousand dollars for each of the applicant's additional salesroom locations. The amount of the bond for other applicants is fifty thousand dollars for the primary place of business twenty-five thousand dollars for each additional places of business. Surety Bonds Direct completes the bond forms on behalf of the applicants to ensure accuracy and minimize the risk of rejection of the bond by the Division.