North Dakota Auto Dealer Bond
What is a North Dakota auto dealer bond?
The North Dakota Department of Transportation requires new and used vehicle dealers to be licensed and bonded. Here are the bond requirements:
- Mobile home or manufactured home dealers: $50,000 bond
- New or used motor vehicle dealers: $25,000 bond
- Motor-powered RV dealers or trailer dealers: $10,000 bond
An auto dealer bond holds dealers and dealerships accountable to the law and industry regulations. If a dealer causes a customer financial harm by breaking the law, the customer can file a claim against the bond for compensation.
Get Your Auto Dealer Bond in North Dakota:
How much does a North Dakota 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. If you have excellent credit, expect to pay as little as 1% or less of the total bond amount. Other factors that may impact the cost of your bond include your industry experience and business and personal financials.
ZipBonds can offer $25,000 and $50,000 motor vehicle dealer bonds for as low as 1% of the bond amount for applicants with excellent credit. We can issue $10,000 trailer dealer bonds instantly for just $100.
Why are these bonds required?
Chapter 39 of the North Dakota Century Code requires new and used auto dealers to post a $25,000 surety bond and abide by its terms. If they break the law by committing fraud or another violation, they could face costly bond claims (up to $25,000) and lose their license. The bond protects customers, ensuring compensation if they lose money on behalf of their auto dealer.
Who needs an auto dealer bond in North Dakota?
To apply for the following license types, you will need a surety bond:
- New motor vehicle dealer license
- Used motor vehicle dealer license
- Trailer dealer license
- Motor-powered recreational license
- Motor home license
Visit the North Dakota DOT website to apply for any of these license types.
How to Get Your North Dakota Auto Dealer License
Here’s an overview of what you’ll need to provide the DOT to legally operate your business in North Dakota.
- Complete the Application for Dealer’s License.
- Fulfill all the established place of business requirements.
- Follow the vehicle sales and display rules.
- Purchase a surety bond.
- Obtain liability insurance.
- Pay a $100 license fee.
See the Dealer Handbook for instructions specific to your license type, and then send your complete application packet to the following address. If you have any questions for the MVD, you can call 701-328-1285.
Mailing address:
- Motor Vehicle Division
- Dealer Services
- 608 E. Boulevard Ave.
- Bismarck, ND 58505
Frequently Asked Questions
How long does it take to get a North Dakota motor vehicle dealer bond?
Since this bond requires underwriting, we can’t issue it instantly. However, the ZipBonds team always strives to deliver your bond within 24 hours of application.
Who regulates auto dealer bonds in North Dakota?
The North Dakota DOT regulates licensing and bonding for the motor vehicle industry.
How do I renew my surety bond?
For it to remain active, you must renew your bond each year by December 31 (along with your license). If you’re buying your bond from Zip, we’ll send a reminder when the expiration date is approaching. That way, you’ll have plenty of time to renew your bond and maintain your business license.
What happens if someone files a claim on my bond?
A customer can file a claim if a dealer commits fraud or unethical or unlawful business activity. If the claim is valid, the surety may cover the customer’s losses up to the total amount of the bond. The dealer will then need to pay back the surety for the damages.
Claims can be costly and damage your reputation and ability to get licensed and bonded again, so it’s best to do everything you can to avoid them.
How can I avoid claims on my auto dealer bond?
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 customer complains about something, address the issue immediately to avoid complaints from turning into costly claims.
How to Get Your North Dakota Auto Dealer Bond
ZipBonds offers the fastest and most secure option for getting the surety bonds you need. Our all-digital platform is intuitive and straightforward. Apply online or call us at (888) 435-4191 to get bonded in a flash!
About ZipBonds.com
Founders Ryan Swalve and Zach Mefferd formed the vision for ZipBonds.com 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.