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North Dakota Auto Dealer Bond

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What is a North Dakota Auto Dealer Bond?

Many states require auto dealerships to obtain a license prior to doing business with customers. One component of the licensing process is posting a North Dakota auto dealer bond for new and used car dealerships operating in the state. A North Dakota auto dealer bond works as a form of security against fraud for customers doing business with the dealership. It also ensures a licensed auto dealer complies with state regulations and industry standards.

Similar to other surety bonds, a North Dakota auto dealer bond includes three parties: the principal required to obtain the bond, the obligee, in this case, the North Dakota Department of Transportation, requiring a bond, and the surety company providing the bond. When a claim is made against a bond, the surety company pays the claim amount, but the principal is responsible for repaying any claims.

Are You Required to Get a North Dakota Auto Dealer Bond?

Under North Dakota state law, any person or entity that engages in selling, purchasing, exchanging, or advertises the sale of motor vehicles is considered an auto dealer. These business activities constitute the need for an auto dealer license and the appropriate North Dakota auto dealer bond. The definition of an auto dealer includes both new (franchised) and used auto dealers, trailer dealers, motor-powered recreational vehicle dealers, and mobile home dealers and manufacturers.

Obligee Information for North Dakota Auto Dealer Bonds

The North Dakota Department of Transportation is given licensing authority to enforce regulations placed on auto dealers operating in the state. Through the Motor Vehicle Division of the department, auto dealers must submit initial licensing and bonding information as well as renewal details to ensure compliance with the law. The obligee for North Dakota auto dealer bonds has the following contact information:

North Dakota Department of Transportation

Motor Vehicle Division

608 E Boulevard Avenue

Bismarck, North Dakota 58505

Phone: 701-328-2725

What Does a North Dakota Auto Dealer Bond Cost?

A North Dakota auto dealer bond of $25,000 is required for all new and used dealerships. However, an auto dealer is not required to pay the full bond amount. Instead, dealers pay a small percentage of the bond requirement, ranging from 1 to 10% of the total. The percentage you pay depends on your personal credit history and financial standing of your business.

Because the surety company extends payment for claims on your behalf, there is risk involved in providing an auto dealer bond. Dealers with bad credit pose a greater risk to the surety than dealers who have a higher credit score. To offset increased risk, the surety company charges a higher percentage of the bond for auto dealers with bad credit.

How Do I Get a North Dakota Auto Dealer Bond?

Securing a North Dakota auto dealer bond starts by submitting a brief online application. Your business details and personal credit are reviewed, and the surety company then provides you with a quote for your auto dealer bond.

Expiration Date and Renewal for a North Dakota Auto Dealer Bond

North Dakota auto dealer licenses expire December 31 each year. The North Dakota auto dealer bond that accompanies a valid license has the same expiration date and must be renewed on or before this date. Auto dealers in North Dakota receive information from the surety company that issued the bond about the renewal process and the steps to follow to ensure timely renewal each year.


Frequent Questions

What does an auto dealer bond cost?

Costs are a percentage of the auto dealer bond amount that's required of you, which is based on your personal credit. Use our bond pricing tool to get a quick ballpark estimate.

Can I get a bond with bad credit?

Yes. You can get you approved for a bond regardless of your credit situation. However, the price will increase. You can apply to get an instant approval. As the largest writer of surety bonds in the U.S., we have access to high risk markets that many other agencies do not.

How long does the application take?

It only takes minutes, as we can approve you for your bond instantly online. You can get a no obligation quote on our website at any time.

Can I get auto dealer bond insurance to protect myself?

No. An auto dealer bond does not protect you, it protects the public. However, you can protect yourself or your customers by getting fidelity bonds.


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Our company has been with JW Surety for several years now so when we needed to obtain a bond for a new company, we immediately went to them for help. Our rep, Melissa, was extremely helpful and prompt which made the process extremely easy for me.
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Trying to get a local Surety Bond was like driving a car on three tires. I searched Surety Bonds and found JW Surety Bonds. I got online and filled out the information and with in 30 minutes received a response from Melissa. She was informative, friendly and helpful. One more super satisfied customer.

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About JW Surety Bonds
We are a family owned and operated agency established in 2003. We started with just two people, and grew to become the largest volume bond producer in the nation with 50+ employees. Since day one, our team focus has been on providing real-time online quotes, an easy process, and the best in claims defense. Learn more about our company.