Apply for a North Carolina Surety Bond today! Absolute Surety is a leading NC surety bond company. Apply easily online and take advantage of lowest rates. Quickly browse the bonds we offer for this state, or contact us for a full list.
North Carolina requires people who want to operate auto dealerships to be licensed and bonded. Because the bond is a prerequisite for obtaining an auto dealer license, it is often referred to as a license and permit bond.
A North Carolina Auto Dealer Bond is the dealer’s pledge to comply with all state laws governing the commercial sale of motor vehicles. It provides protection for consumers against financial losses caused by a dealer’s unlawful or unethical sales practices.
Bond Penalty Amount: $50,000 for 1 dealership. $25,000 for each additional salesroom/location
Bond Term: 1 year/3 years
Who Needs Them?
Both dealers applying for new licenses and those renewing existing licenses must purchase a bond, whether they sell used vehicles, new vehicles, or both. A separate bond must be purchased for each location.
How Do They Work?
The bond agreement is a legal contract between three parties. Each party has its own rights and responsibilities under the terms and conditions of the bond.
The North Carolina Division of Motor Vehicles, License and Theft Bureau (the obligee)
The dealer (the principal)
The firm issuing the bond (the surety)
If the dealer violates any of the bond’s terms and conditions, resulting in a financial loss to a consumer, a claim may be filed against the bond. The surety will conduct an investigation into the validity of the claim, and if everything checks out, will pay the claim up to the full penal amount of the bond.
That payment does not relieve the dealer of any financial obligation, however. Surety bond contracts include an indemnification clause that requires the dealer to reimburse the surety company. Essentially, the surety is advancing the payment for a short period of time so that the dealer can gather the necessary funds.
What Do They Cost?
The required bond amount for a dealer’s first location is $50,000. If there are additional locations, the required bond amount for each of them is $25,000. However, the dealer pays a premium that is only a small percentage of the required bond amount.
The surety’s underwriters look at a number of factors to determine the premium rate for each applicant. The most significant of these factors is the dealer’s personal credit score. You can expect to pay anywhere between 0.5% ($250) to 5% ($2,000) of the bond penalty amount if you maintain good credit.Applicants with poor credit can expect to pay a higher premium.
What To Do After You Purchase Your Bond?
After you receive your dealer bond from Absolute Surety, you will need to sign it and mail it along with the attached power of attorney to North Carolina Division of Motor Vehicles.
If you’re opening or currently operating a motor vehicle dealership in North Carolina, you can rely on us to get you the dealer bond you’ll need. Apply online today!
"Since 2001, I have jumped through hoops every 2-years come bond renewal time. With Absolute Surety and their user-friendly online application form, it was all done in MINUTES! Highly Recommended!!!"
Sean McCabe, Orlando