North Carolina Auto Dealer Bond

North Carolina Auto Dealer Bond

The North Carolina Department of Transportation Division of Motor Vehicles (NCDMV) requires a surety bond to be filed for a motor vehicle dealer to be licensed as a franchise, used, wholesale, distributor, factory branch or manufacturer. A $50,000 Auto Dealer Bond is required for the business’ first location, with another $25,000 bond required for each additional location. 

PURCHASE AUTO DEALER BOND

Jet provides auto dealers direct access to surety underwriters and claims handlers without any agents or brokers in the middle. Jet dramatically simplifies the bond purchase and filing process with competitive rates, a no down payment option, and no obligation monthly payment option.

What Is the Price for the Auto Dealer Bond?

The cost for a $50,000 Auto Dealer Bond starts as low as $300 for one year or $30 per month. Second locations start at $150 a year or $15 monthly. Rates are based on the personal credit of the dealer, done through a process called underwriting, which at Jet is done automatically online. Below illustrates Jet’s best pricing options.

Bond TermCost
Monthly$30
1 Year$300
2 Years$525
3 Years$750
North Carolina Auto Dealer Bond Pricing

Other companies use underwriting to assess many arbitrary factors, extending the time it takes to provide a rate. Jet streamlines the process to have an immediate rate available for purchase. 

Jet is the only company to offer monthly payments on the North Carolina Auto Dealer Bond. Gone are the days of 30-40% down payments and 20-30% APRs! Jet’s monthly payments require zero down payment, zero interest and zero fees. You can cancel the bond at any time by simply stopping payment.

Can Jet File the Auto Dealer Bond for Me?

Yes! Jet will send your Auto Dealer Bond directly to the DMV for filing. When you have purchased the bond, Jet will complete the bond form with Jet’s seal and needed signatures. Our team mails the original bond to the DMV to be filed right away. 

For new dealership applicants, you may need the original bond form to submit along with the initial NCDMV licensing paperwork. Jet can send it to you upon request within the online application process. When you have all documentation ready, mail all paperwork to:

North Carolina Department of Transportation
Division of Motor Vehicles
3129 Mail Service Center
Raleigh, NC 27697

Can I Cancel My Auto Dealer Bond and Get a Refund?

Yes, Jet will provide a refund if you need to cancel your Auto Dealer Bond. Unlike other surety companies that withhold minimum earned premiums and commission fees, Jet will provide you a full refund on any unearned premium. Meaning any time that the bond has not been “used”, that amount will be reflected in your refund. 

If you are enrolled in the monthly payment plan, you’ll simply need to contact our team to cancel your bond and we will stop the automatic payment withdrawals

Jet will send out a cancellation notice to the DMV immediately following your request to cancel. However, since the DMV keeps the bond in effect for an additional 30 days, that time must be accounted for in the bond return as the bond remains active.

What Is the Purpose of the Auto Dealer Bond?

An Auto Dealer Bond ensures the dealer conducts business according to the Motor Vehicle Dealers and Manufacturers Licensing Law (General Statutes Chapter 20, Article 12) and the Vehicle Mileage Act (Article 15). The NCDMV enforces these statutes upon auto dealers as part of their mission to connect people safely with motor vehicle products.

This bond is a guarantee provided by Jet covering any financial harm that falls upon the public due to the fraudulent or negligent actions of a car dealer. Think of Jet as a person vouching to North Carolina that you, the dealer, are trustworthy to sell vehicles in the state. The state expects you to abide by regulations and address customer complaints, and so does Jet who is guaranteeing your business with a surety bond.

How Does a Motor Vehicle Dealer Avoid Bond Claims?

The best way to avoid claims is to follow licensing regulations and conduct business in an honorable manner. If there is misconduct, a person that has purchased a motor vehicle and suffered damages may file a complaint with the DMV. This complaint may be resolved between the parties before it escalates into action on the bond. 

Under the General Statutes 20-294, certain acts by a motor vehicle dealer may be cause for disciplinary action from the NCDMV including revocation, suspension, or denial of a license. Examples of these acts include:

These are just some of the ways a dealer can get in trouble. A motor vehicle dealer guilty of financial damage to a person may face a claim against the Auto Dealer Bond for reimbursement to that person.

What Happens if a Bond Claim Is Filed?

In the event that a claim is filed against your Auto Dealer Bond, Jet will protect you from false accusations. At the outset of Jet’s investigation, we will request any evidence from the claimant and any applicable records from you the dealer. 

The DMV must be notified within 10 days of any action starting the bond claim process. If the investigation concludes and Jet finds the claim to be valid, Jet will reimburse the customer in the amount of the claim, up to the bonding limit. However, since bonds are like an extension of credit, the dealer is ultimately held responsible for the amount that was paid out by Jet and must pay the amount of the claim back.

Other carriers, who are never the person who sold you a bond, may try to avoid legal fees and quickly pay out bond claims, leaving dealers with a bill for the bond payout and never providing any defense.

How Does the Application Process Work With Jet?

Our team has simplified the application process, only asking for necessary information on the application, so you can get your Auto Dealer Bond quickly. Once you have entered basic information, Jet will offer an approved rate that is ready for purchase.

PURCHASE AUTO DEALER BOND

You will receive a copy of the bond and receipt immediately after the purchase for your own records.

How to Renew the Auto Dealer Bond With Jet

If you enroll in the monthly payment program, you will not have to worry about renewing your bond! Each payment that is received will keep your bond on file. 

For bonds that are purchased on annual terms, a renewal payment will need to be submitted to continue coverage. When the term is drawing to a close, Jet will send out a renewal notice well in advance of the bond expiration date. The renewal can be processed online instantly, or you can mail in payment. If any payment terms need to be updated, changes can be made during this time.

Does the Auto Dealer Bond Expire?

Not with the NCDMV. The Auto Dealer Bond remains active until a bond cancellation has been requested by Jet. The bond will only expire on a specific date with Jet if an annual renewal or monthly payment is not made.

Does a Motor Vehicle Dealer Need Any Other Coverage?

Auto dealers must also hold a comprehensive liability insurance company policy for dealer plate coverage. A Garage Coverage Form-Automobile Dealer Supplementary Schedule policy number or binder number from an insurance company can also be used for dealer plate coverage.

North Carolina Auto Dealer Bond Form