North Carolina Auto Dealer Bond

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Auto dealer in North Carolina

What is a North Carolina auto dealer bond?

The North Carolina Department of Transportation of Motor Vehicles requires a $50,000 surety bond before you can get your auto dealer license. This includes licenses for used dealers, wholesale dealers, distributors, franchises, manufacturers, and factory branches. If you have multiple locations, you must post an additional $25,000 bond for each subsequent location.

Get Your Auto Dealer Bond:

How much does a North Carolina auto dealer bond cost?

Auto dealer bond premiums can vary based on applicants’ credit scores: the higher your credit score, the lower your annual premium. You can expect to pay as little as 1% or less of the total bond amount if you have excellent credit. Other factors that may impact the cost of your bond include your industry experience and business and personal financials.

Once you’ve purchased your motor vehicle dealer bond from a surety provider like ZipBonds, remember to renew it before expiration. If you’re buying your bond from us, we’ll send out a reminder each year when the expiration date is approaching. That way, you’ll have plenty of time to renew your bond and maintain your business license.

Why are auto dealer bonds required in North Carolina?

The state requires auto dealers to be bonded and licensed to guarantee compliance with the law and industry regulations. If an auto dealer causes the public financial harm or fails to pay all required taxes and fees to the state, they could face bond claims.

The state hopes to prevent fraud, impositions, and other forms of abuse on its citizens by regulating the motor vehicle dealer and manufacturing industry. Learn more.

How do North Carolina auto dealer surety bonds work?

An auto dealer surety bond is a three-party agreement between an obligee, a principal, and a surety. This bond’s official name is North Carolina Motor Vehicle Dealer Bond.

  • Obligee: West Virginia Division of Motor Vehicles (DMV)
  • Principal: Motor vehicle dealer
  • Surety: Financial institution that issues and backs the bond

If your auto dealership engages in fraudulent activities or breaks state laws, the party that loses money can file a claim against you. If the claim is valid, your surety will cover the costs to settle the claim upfront. You must later repay your surety in full (up to the bond amount of $25,000). See North Carolina Statutes § 20-294: Grounds for denying, suspending, placing on probation, or revoking licenses.

Who needs this bond and why?

The following parties must obtain a license and bond in North Carolina, according to the North Carolina General Statute § 20-288.

  • Motor vehicle dealers, wholesalers, and manufacturers
  • Factory branches
  • Distributors and distributor branches

Frequently Asked Questions

You must meet these minimum requirements to obtain your motor vehicle dealer license in North Carolina. See the New Dealer Application Packet for detailed instructions.

  • Have an established salesroom or office.
  • Ensure your salesroom/office follows all state, county, and municipal zoning regulations or ordinances.
  • Obtain a $50,000 surety bond for your first location and a $25,000 bond for each additional location.
  • Make sure you have a sign designating the trade name of your business in block letters.
  • Have evidence of an assumed name filed with the Register of Deeds.
  • File articles of incorporation with the North Carolina Secretary of State (if applicable).
  • Obtain a comprehensive liability insurance company policy.
  • Accurately describe the physical location of your business in your license application.
  • Used motor vehicle dealer applications must show proof of completing an approved 12-hour licensing course in the last 12 months.
  • Have your established salesroom/office inspected and approved by the License and Theft Bureau.

Submit your application package to the address below:

  • Division of Motor Vehicles
  • Vehicle Services – Dealer Unit
  • 3129 Mail Service Center 
  • Raleigh, NC 27699

Avoid illegal activities and fraudulent business practices to prevent claims on your bond. Pay all taxes you owe. Also, ensure you comply with your licensing regulations. If a client complains about something, address the issue immediately to avoid complaints from turning into costly claims.

Your license and bond will be valid for one year and must be renewed to remain active. If you purchase your bond from ZipBonds, we’ll notify you months before your bond expires, so you have plenty of time to renew.

Yes, you may still be able to get bonded by paying a higher premium. Expect to pay upwards of 5-10% if you have a low credit score.

Absolutely. Simply log into your ZipBonds account and find the bond you need. If you don’t have an account with us yet, you can register online at ZipBonds for Agents.

Other Helpful Resources

How to Get Your North Carolina Auto Dealer Bond

ZipBonds offers the fastest and most secure option for getting auto dealer bonds. Our all-digital platform is intuitive and straightforward. Apply online or call us at (888) 435-4191 to speak with an agent directly. Many of our bonds can be processed and issued immediately online.



Founders Ryan Swalve and Zach Mefferd formed the vision for when they realized how overly complicated it was to help clients place surety. The frustration of being unable to incorporate the technology they’d used in other insurance-focused projects left them thinking “there has to be a better way.”

Fast forward a couple of years, and that better way is the impetus of everything we do at ZipBonds. We constantly look for innovative ways to improve the bonding process for our clients and agents. Our team comprises individuals who understand all angles of surety – for companies, agencies, and individuals. Incorporating everyone’s point of view to improve the process while simultaneously integrating cutting-edge technology is what sets our business apart.