North Dakota Motor Vehicle Dealer Bonds

Get a Free Quote for Your North Dakota Motor Vehicle Dealer Bond Today

Who Is Required To Purchase an Auto Dealer Bond In North Dakota?

There are six primary categories of dealer licenses in the state.

• New vehicle dealers
• Used vehicle dealers
• Motor-power recreational dealers
• Trailer dealers
• Motor home dealers
• Low speed dealers

Low speed dealers are not legally required to be licensed. However, if you wanted to get licensed to have access to dealer registration numbers and plates.

The rest of the license categories or classifications all require a surety bond to get license with varying bond amounts per license.

What Are The North Dakota Auto Dealer Bond Amounts?

A surety bond has an amount associated with it. This amount is the maximum dollar figure of financial protection available to customers or the North Dakota Department of Revenue in the event of failure to pay taxes.

In the next section you'll learn why you need this surety bond with this specific bond amount.

The bond amounts are as follows:

Why is a North Dakota Motor Vehicle Dealer Bond Required?

The North Dakota Department of Transportation only wants honest and reputable dealerships serving the public. This is why they require the length licensing process.

Yet, despite this licensing process, every year there are dealerships who will purposefully harm their customers to increase profits.

Examples of these purposeful acts of fraud include:

• Improperly transferring a title
• Selling vehicles with no title or a false title
• Misrepresenting vehicle information like mileage, manufacture year, or condition
• Lying about accident history or structural work history
• Stealing customer deposits
• Choosing not to pay the sales taxes to the California Department of Revenue

If a customer or the state is purposefully harmed by a licensed dealer through any of these or similar acts, a claim can be made against the dealer for financial compensation.

This compensation comes from the bond amount. The bond amount is the maximum dollar amount any one claim, or multiple claims, can be again a dealer.

To recap, the surety bond is used by the Department of Transportation as the primary tool to hold all licensed dealers accountable to the promises they made when obtaining their license.

How Much Does a North Dakota Auto Dealer Surety Bond Cost?

All North Dakota dealer bonds are credit driven. This means the primary credit of the business owner or owners will be the primary factor that determines the price.

This price is determined by a surety. A surety is an insurance company that underwrites surety bonds.

Every surety conducts their own assessment of each applicant using their own guidelines. Including a credit check, these factors are:

• The personal credit of the owner or owners
• Industry and dealership experience
• Prior bond history if any owner has been licensed and bonded in the past

From this assessment they will quote a rate and this rate multiplied by the bond amount is the price you'll pay for your bond for one term.

This is covered in more detail in the next section, but in North Dakota the bond term is 12 months from your bond's active date.

This is one payment for the 12 month period.

How To Save Hundreds of Dollars Purchasing Your Bond

We are Surety Bonds Direct, a specialized surety agency. We have access to the highest A rated sureties who specialize in motor vehicle dealer bonds.

We don't even understand it, but different sureties will quote vastly different rates for the same applicant. We routinely see rates range from 1 to 3 percentage points different.

This means you can save hundreds of dollars.

Let's look at some example pricing for the $25,000 bond. Pay attention to how one to two percentage points affect the price you'll pay.

Example prices help but you can get your exact pricing within 24 hours when you request your price quote or call a bond specialist at 1-800-608-9950.

There's no cost to have a bond specialist collect rates and find you the lowest pricing. And there's no obligation to purchase either.

Our price quotes are valid for 30 days. And once you have pricing, you'll be able to make the right decision for your dealership and goals.

How To Purchase a North Dakota Vehicle Dealer Bond?

Purchasing a vehicle dealer bond and having it issued is a fast process. It takes about 1 business day from when you purchase to have your bond emailed to you.

Once you get your custom pricing and you're ready to purchase, you just complete an online order form.

After your payment is processed, our issuance team will prepare your bond with the:

• Correct bond form required by the Department of Transportation
• Required signatures and seals
• Power of Attorney

We'll email you a copy of the bond as the Department of Transportation only requires a copy of the bond as proof that you are officially bonded.

This process takes 1 business day to complete.

How Long Does a North Dakota Auto Dealer Bond Last?

North Dakota auto dealer bonds have a bond term of 12 months from the active date, called an effective date..

You'll choose your active date when you purchase your bond. It will typically coincide with when you submit your license application.

Renewing your bond after 12 months is easy.

Your bond specialist will contact you 30 to 45 days in advance to make sure the renewal premium is paid on time so your bond remains active.

Once you pay the renewal premium, you don't have to do anything else. Your bond is active and you can continue selling vehicles.

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

The North Dakota Department of Transportation has a dealer manual that helps outline all of the steps to get licensed in detail.

At a high level, the steps are:

• Pay all the appropriate fees including the application fee, branch fee, dealer plate fees and more
• Complete the dealer occupational application
• Purchase your auto dealer surety bond
• Establish a place of business that must meet a set number of requirements
• Have your business location inspected
• Have your fingerprints and criminal background check completed
• Outline your business structure