North Dakota Auto Dealer Bond Overview
If you want your North Dakota dealer license, you’ll also have to obtain an auto dealer bond.
The auto dealer bond is a type of surety bond that guarantees compliance with all relevant state laws and regulations. The bond is designed to safeguard the interests of car buyers, by providing them with the option to file a claim if the dealer is engaging in fraudulent or unethical business practices.
Like most surety bonds, the North Dakota auto dealer bond is essentially a three-party contractual agreement between: a dealer (principal), the state of North Dakota (obligee), and a bonding company (surety). The bonding company is the side that backs the agreement and guarantees to the obligee that the principal is financially stable and can be trusted.
If a dealer is found to be in non-compliance of state laws or there is a proven case of fraud, they will face a claim up to the penal sum listed on the bond. The surety is, at first, legally responsible for repaying the bond claim, but ultimately it is the dealer’s responsibility to pay off all losses incurred.
Let’s take a quick look at the bonding requirement for North Dakota:
Surety Bond Name: North Dakota Auto Dealer Bond
Surety Bond Amount: $25,000
Obligee: North Dakota Department of Transportation
Motor Vehicle Division
608 E. Boulevard Avenue,
Bismarck, North Dakota 58505-0780
Expiration Date: N/A
Read on, for more important details about your North Dakota auto dealer bond, such as cost, bad credit options, and other licensing requirements.
North Dakota Auto Dealer Bond Cost
Dealers usually want to know as much as possible about the factors determining the cost of their auto dealer bond. The easiest way to understand how surety pricing works is to think of it in terms of two numbers.
The total bond amount is the sum listed on the bond, which is determined by the state. It is the sum up to which you can face claims in case you breach the bond agreement. As with insurance, however, you only pay a small percentage (called a bond premium) in exchange for the surety guaranteeing that you are capable of paying the whole sum if need be.
As the underwriter of the bond, it is the bonding company that determines what bond premium you are going to pay. Surety bond companies evaluate your application and look for a number of different factors such as:
- Personal credit score (most important)
- Asset profile
- Personal financial statements
- Business financial statements
If you have good financials and a good credit score, you will pay a standard market rate of between 1,5% and 3% of the total bond amount.
|Surety 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||$250-$500||$375-$750||$500-$1,000||$750-$1,750|
Another important factor to consider is choosing a surety bonds agency. Bonds agencies are the intermediaries between the public and bonding companies. A good surety bonds agency will have multiple partnering sureties, all in good financial standing. Bryant Surety Bonds works only with A-rated and T-listed bonding companies, which allows us to shop around for your bond until we get the lowest possible rates. It also means the bond you get with us comes with a guarantee that it will be accepted by the obligee.
If you’re ready to get started, you can apply online now and get a free bond quote instantly. To learn more about the cost of your North Dakota auto dealer bond, you can check the surety bond cost calculator on the right, or go to our Surety Bond Cost page. If you have any questions, don’t hesitate to call us at (866)-450-3412.
Bad Credit Dealer Bonds
Getting bonded if you have bad credit or a spotty financial history is still possible. With applicants like this in mind, we’ve designed our Bad Credit Program. Thanks to our program, you can still get a bond from the same strong bonding companies and make sure your dealership is compliant.
Since bonding companies consider your credit score very important, they will offer higher bond premium quotes than they do for standard market applicants. This means you can see premiums of between 4% and 7% of the total bond amount.
North Dakota Dealer License - Application and Renewal
An important step in becoming an auto dealer in North Dakota, the auto dealer bond is just one of the licensing requirements. There are a few more that you need to take in consideration, including:
- Fill in the Application for Dealer’s License
- Have a business location with at least 2,500 sq. ft.
- Set up a clearly visible sign (at least 32 sq. ft.) with your dealership’s name
- Get garage liability insurance
- Get a publicly listed landline phone
- Pay applicable fees
You need to renew your license before Dec. 31st of each year.
As for your bond renewal, quotes tend to vary only slightly from year over year, but if you take steps to improve your credit score or financials, you might see the price go down, sometimes considerably. If you get your bond with Bryant Surety Bonds, we will notify you ahead of the deadline that renewal is due, so you can focus on your work and not worry about compliance.
Get Your North Dakota Auto Dealer Bond Today
Now that you have all the facts, you can use our online application and get a free bond quote instantly. Submit your application, and you’ll receive a call from one of our surety bond agents, who will take you through the rest of the application process.
We’lll send you the original bond form by mail as soon as it is signed by the bonding company. Copies are available through fax and mail, and we advise you to keep at least one copy for your personal records.
Got any more questions about North Dakota auto dealer bonds? Call us at (866)-450-3412 and we will be happy to help!