Motor Vehicle Dealer Bond in North Carolina

What this bond requires in North Carolina

Bond must be a corporate surety bond, cash bond, or fixed-value equivalent filed with the Commissioner of Motor Vehicles before license issuance or renewal (N.C.G.S. § 20-288(e)). Licenses are issued for a two-year term (N.C.G.S. § 20-288(c)). The bond runs to the benefit of any purchaser (including another dealer) who suffers loss from failure to deliver clear title or other Article 12 or Article 15 violations. Surety cancellation requires at least 30 days prior written notice by certified mail or electronic means to both the license holder and the Commissioner.

Who requires it

The motor vehicle dealer bond is required by the North Carolina Division of Motor Vehicles, License and Theft Bureau (Dealer Regulation Section) under N.C.G.S. § 20-288(e).

How to file in North Carolina

Applicant submits the New Dealer License application (Form LT-400) to the NC DMV License and Theft Bureau Dealer Regulation Section along with the executed Motor Vehicle Dealer Surety Bond (Form LT-409) on the prescribed state form, evidence of an established salesroom meeting minimum requirements (LT-415), proof of garage liability insurance, zoning approval, completion of the prelicensing dealer education course, and the license fee. The Commissioner reviews the application and, upon approval, issues a two-year dealer license; bond and supporting documents must remain continuously on file and are re-verified at each two-year renewal.

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Common questions

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