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North Dakota Motor Vehicle Dealer Bond

Complete Guide to Bonding a Car Dealership

  • Lower rates on motor vehicle dealer bonds
  • Online application that saves time
  • Bad credit bonding options
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North Dakota Motor Vehicle Dealer Bonds Explained

Also known as auto dealer bonds, these types of surety bonds are required in virtually every state. Their purpose is to ensure that dealers abide by state statutes, and that they don’t use fraudulent business practices.

Motor vehicle dealer bonds are a contractual agreement between three sides: the dealer (principal), the state (obligee), and a bonding company (surety). The role of the surety is to back the agreement, meaning that it also carries financial and legal responsibility for the actions of the principal. If a principal is found to be in violation of the bond agreement, they have to compensate the claimant.

Here’s a quick look at the bonding requirement:

Surety Bond Name: North Dakota Motor Vehicle Dealer Bond

Total value: $25,000

North Dakota Department of Transportation
Motor Vehicle Division
608 E. Boulevard Avenue,
Bismarck, North Dakota 58505-0780

Expiration date: Dec. 31

Click on the button at the beginning of the page to begin your online application for a North Dakota motor vehicle dealer bond. Alternatively, keep reading the sections below for more useful information, such as calculating your bonding cost or applying with bad credit.

For any questions, don’t hesitate to call us at (877) 514-5146.

Frequently Asked Questions

Who needs to get a North Dakota motor vehicle dealer bond?

Anyone who is engaged in the business of selling motor vehicles in North Dakota is required to obtain a surety bond. According to North Dakota law, a dealer is “every person, partnership, corporation, or limited liability company engaged in the business of buying, selling, or exchanging motor vehicles, or who advertises, or holds out to the public as engaged in the buying, selling, or exchanging of motor vehicles, or who engages in the buying of motor vehicles for resale.”

This text applies to both new and used-car dealers.

What is the cost of a North Dakota motor vehicle dealer bond?

The cost of your North Dakota dealer bond most heavily depends on your personal credit score, as well as that of all other owners, if any. While the total value of the surety bond is $25,000, this is not what you will be required to pay to get bonded. $25,000 refers to the maximum compensation a claimant can receive, if they file a successful claim against a dealership.

Annual bond premiums for applicants with good credit are generally between 1% and 3% of the total bond amount. Other factors can also be weighed as part of your application. For example, dealers with strong financial statements or impressive industry experience should submit financial statements and a resume, as bonding companies look favorably on these.

Auto Dealer Bond Cost Based on Credit Score
Surety Bond Name Surety bond amount Above 700 Between 650-699 Between 600-649 Below 599
North Dakota Motor Vehicle Dealer Bond $25,000 $188-$375 $250-$750 $625-$1,250 $1,250-$2,500

Our What Does a Surety Bond Cost? page contains some more useful tips and information on the cost of getting bonded.

Can I get bonded with bad credit?

An applicant with bad credit means an elevated risk for the surety underwriter. Certain issues, such as having an open bankruptcy or late child support payments, can prevent you from obtaining an auto dealer bond.

However, a low credit score in itself should be no obstacle, thanks to our bad credit surety bonds program. 99% of dealers will still be able to get bonded, though at slightly higher premiums. Even so, premiums rarely go above 10% per year. Taking steps to improve your credit report will mean a lower premium when renewal is due.

How does applying for a North Dakota motor vehicle dealer bond work?

The application process is not something to worry about. Lance Surety Bonds offers a quick online application which allows you to get your free bond quote in no time.

The underwriting process varies depending on the surety bond company. We’ll be in touch with you quickly to let you know what you need to provide in order to finalize your application. Generally, we can get your bond ready in just a few business days.

How do I renew my North Dakota auto dealer bond?

As outlined in the beginning, dealer bonds in the state expire on December 31 by law. This means that they need to be renewed before then, in order for your license to remain in force.

The bond renewal process is even simpler than the original application. We will send you a renewal reminder several times ahead of the deadline, so you can focus on your business and not worry about compliance. Once you pay your bond quote, your motor vehicle dealer bond will be renewed.

Your renewal premium will be similar to what you paid previously, unless there is a significant change in your credit report or finances.

How do I get a North Dakota dealer license?

The licensing process involves many steps and the auto dealer bond is just one of them. The requirements can vary slightly depending on the license you are applying for, but there are many overlapping steps. Some of them are:

  • Submit an Application for a Dealer’s License (available online)
  • Purchase garage liability insurance
  • If you have secondary lots they must be no more than 5 miles away
  • Pay all applicable fees
  • A sign that conforms to state requirements: a minimum of 32 sq. ft. and displaying your dealership name in letters no smaller than 10 inches
  • A lot of at least 2,5000 sq. ft.
  • Keep business records in one place of business
  • A publicly listed telephone

What happens if there is a claim against my bond?

If you fail to comply with the terms of the bond language, the licensing requirements, or the state statutes regulating the dealership industry, you may face a bond claim. The same is true if you have used fraud against one or more of your customers.

If you face a claim, you should try to resolve the dispute outside of court, to consume less time and resources, and protect your reputation. Bond claims can be very detrimental to your business and your reputation. You may even be denied an auto dealer bond next time you apply.

If you have sufficient proof that you did not violate the bond agreement, you should present it to the surety bond company as they can help with legal assistance in court.

To avoid claims in the first place, you should stay up-to-date with all legislative amendments and hold regular trainings for your staff.

Still Have Questions? Check Our FAQ Pages

What Our Clients Have To Say?

Kimberlee Ables
Quick response times and turn around for issuing bonds. Great customer service and very knowledgeable. We have used Lance Surety multiple times and have never been disappointed. Highly recommend them and Collette!
Andrew Poincot
Long story short, these guys cut through the B.S. and get the job done. Responsiveness, excellent! Communication, excellent! Respect for their industry partners, excellent! John, Collette, Ryan, you're all-stars! Thank you!
Margie Martinez
We decided for Lance Surety Bond's quote for 2 reasons; Price and Customer Service. Our Representative Ryan was just SUPERB!! [...] I highly recommend Lance Surety Bond for all your Bonding needs! I'll definitely come back for all of mine. :-) Thanks Ryan!