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North Carolina Auto Dealer Bond Overview
Getting a North Carolina auto dealer bond is a key step to becoming a licensed car dealer in the state. The auto dealer bond serves as an extra guarantee that your dealership will follow all rules and regulations that govern this business in the state.
In essence, the bond is a contract between three parties. The principal is your North Carolina auto dealership, the obligee is the state– more specifically, the North Carolina Division of Motor Vehicles’ License and Theft Bureau– and the surety is the one providing the bond. Getting bonded is a sign of trustworthiness for your dealership.
- Surety Bond Name: North Carolina Auto Dealer Bond
- Surety Bond Amount: $50,000 for your first location and $25,000 for each additional location
- Obligee: North Carolina Division of Motor Vehicles’ License and Theft Bureau
- Required Expiration Date of Dealer Bond: N/A
- Surety Bond: Continuous
Just like all surety bonds, the North Carolina auto dealer bond serves as protection for the general public, and not as insurance for your business. In case you transgress the rules and your obligations under the bond, a claim can be made against you. If proven, the penal sum of the bond is used to compensate the affected parties. The surety covers the costs of claims up front, which you’ll be required to reimburse in full. This means claims should be avoided, as they can cause serious harm to your business and finances.
North Carolina Auto Dealer Bond Cost
While $50,000 might seem like a big bonding amount, in practice, you need to pay only a percentage of it to get bonded, which is called the premium. The surety will look a several factors to determine your surety bond cost, most importantly, your credit score.
- If your credit score is above 650, you’ll likely have to pay between 1% and 3% of the bond amount.
- For applicants with credit scores between 600 and 649, the rates range between 2.5% and 5%.
- Thus, you might end up paying as little as $500 to get your North Carolina auto dealer bond.
You can consult the surety bond costs that you can expect to pay in the different credit score ranges in the table below.
|Surety bond name||Surety bond amount||Cost with credit score above 700||Cost with credit score between 650-699||Cost with credit score between 600-649||Cost with credit score below 599|
|North Carolina Auto Dealer Bond - first location||$50,000||$375-$750||$500-$1,500||$1,250-$2,500||$2,500-$5,000|
|North Carolina Auto Dealer Bond - each additional location||$25,000||$188-$375||$250-$750||$625-$1,250||$1,250-$2,500|
When you apply for your bond, the surety takes a close look at your personal and business financials in order to assess the risk of getting you bonded. The healthier your finances are, the lower the bond premium will be. Some of the indicators that are considered include:
- Personal credit score- primary factor
- Financial documents
- Assets and liquidity
- Your experience in the industry
Choosing the right surety provider can also help you pay less for your North Carolina auto dealer surety bond. Here at Bryant Surety Bonds, we offer exclusive bonding rates to our clients. We are able to do so because we foster close relationships with numerous A-rated, T-listed surety companies, which allows us to shop around and get you bonded at the best price.
For an estimate of your bond cost, you can use our surety bond cost calculator in the right sidebar. Your exact bond quote is a step away– just apply online or call one of our surety bond experts at (866)-450-3412.
Bad Credit Program
For our clients with less-than-perfect credit, we’ve created the Bryant Surety Bonds’ Bad Credit Surety Bond Program. We know how difficult it can be to get your North Carolina DMV bond if you have a low credit score, tax liens, bankruptcies, or civil judgments, and we’re here to help.
If your credit score is below 600, your bond premium will be slightly higher, between 5% and 10%. The higher percentage is required to mitigate the risk involved. Still, the program is a great opportunity to run your business successfully and improve your finances over time.
North Carolina Auto Dealer License and Renewal
Whether applying for your first auto dealer license in North Carolina, or renewing an existing one, you have to submit a dealer application form, together with all necessary documents that prove you meet the requirements.
Your first step is to identify what kind of dealer license you need, depending on the type of business you want to run. The most common licenses include new motor vehicle dealer, used motor vehicle dealer, motor vehicle sales representative, manufacturer, factory branch, factory representative, distributor, distributor branch, distributor representative, or wholesaler.
Some of these additional documents include:
- Proof of lease or ownership of your retail or wholesaler location
- Approval of the location by a License & Theft Bureau agent
- Zoning regulation compliance documents
- A business sign
- Evidence of an assumed name filed with your county’s Registry of Deeds
- Comprehensive liability insurance policy
- Local and municipal “Traders” licenses
- Licensing training if you want to sell used cars
- Application fee payment
- $50,000 North Carolina dealer bond for your first location, $25,000 for each additional one
After the licensing authority verifies that you’ve fulfilled all the requirements, your application will be processed and approved. For more information, the Motor Vehicle Dealer and Manufacturer Regulation Manual is an excellent resource.
When you renew your license, you’ll have to renew your North Carolina auto dealer bond as well. As your business finances and personal credit score can change, make sure you work on improving those stats, so that you can reduce your surety bond cost over the years.
Get Your North Carolina Auto Dealer Bond Today
The bonding process is usually straightforward. You can apply online or call us at (866)-450-3412 to get your free quote in no time. If you have any questions about your bond application, our bonding experts will be glad to give you a hand in the process.
When you obtain your North Carolina auto dealer bond, make copies for your records, since the original bond form is required along with your dealership license application.