North Dakota Auto Dealer Bonds: What You Post Depends on What You Sell

How a claim works

If you fail to meet your obligations under Title 39, a person who was harmed can make a claim against your bond. Any third party who is injured within the terms of the bond may proceed against you and the surety without making the state a party to the proceedings. The surety's total liability to all claimants cannot exceed the amount of the bond. The motor vehicle dealer bond form makes the bond continuous, with a new $25,000 obligation for each annual license period you are licensed.

A surety can cancel the bond as to future liability by sending written notice by certified mail to you and to the department, and the bond becomes void for any later liability 30 days after that notice is mailed. If your bond is canceled, your dealer license will be suspended.

Fees

North Dakota charges a motor vehicle dealer license fee of $100 per year, and the department issues one dealer plate with it. A new applicant also pays a nonrefundable initial inspection fee of $100. These are state fees, separate from the bond premium you pay a surety.

Your place of business

A motor vehicle dealer needs an established place of business: a permanent enclosed building of at least 250 square feet, next to the dealer's primary display lot, with the building and lot together covering at least 2,500 square feet on property zoned for this use or otherwise allowed by the zoning authority. Before a motor vehicle dealer license is issued, you must give the department proof of a continuous policy of liability insurance for your business operation.

Steps

1. Confirm your dealer type. Match your business to a type and its bond amount: $25,000 for new and used motor vehicle dealers, $10,000 for trailer and motor-powered recreational vehicle dealers, or $50,000 for mobile and manufactured home dealers.
2. Set up your place of business. If you are a motor vehicle dealer, have a permanent enclosed building of at least 250 square feet next to your primary display lot, with the building and lot together covering at least 2,500 square feet on property zoned for this use or otherwise allowed by the zoning authority, and have proof of liability insurance ready for the department.
3. Get your bond. Motor vehicle dealers use the Department's Form SFN 2933 for the $25,000 bond.
4. File the bond. You file the bond with the director before the license is issued.
5. Submit your application and fees. New and used motor vehicle dealers pay the $100 annual license fee and the $100 nonrefundable initial inspection fee; confirm the current application form and your fee with NDDOT.
6. Renew by year-end. Your license expires December 31, so renew each year and keep your bond continuous.

Sources

• North Dakota Century Code, chapter 39-22 (motor vehicle dealers)
• North Dakota Century Code, chapter 39-22.1 (trailer dealers)
• North Dakota Century Code, chapter 39-22.3 (motor-powered recreational vehicle dealers)
• North Dakota Century Code, chapter 39-18 (mobile and manufactured home dealers)
• North Dakota Century Code, chapter 39-22.2 (repealed wholesale licensing)
• NDDOT Motor Vehicle Dealer Handbook
• NDDOT Form SFN 2933, Motor Vehicle Dealer Bond

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