A North Dakota Motor Vehicle Dealer Bond is a type of surety bond required by the North Dakota Transportation Department for all new and used motor vehicle dealers in the state. The bond is a form of protection for consumers of used and new motor vehicles purchased from a dealer in North Dakota. The bond guarantees that a dealer will comply with all applicable laws, rules, and regulations governing the sale of motor vehicles in the state. The bond also ensures that a dealer will properly account for all funds received from customers during the sale of a motor vehicle. If a dealer fails to comply with the laws, rules, and regulations governing the sale of motor vehicles, customers may be able to make a claim against the North Dakota Motor Vehicle Dealer Bond.
North Dakota Car Dealer Bonds are required by North Dakota's DOT to obtain your Dealer license. The MVD Bond amount for the sale of New and used vehicles is set at $25,000. The Auto Dealer bond ensures that the principal shall comply with the conditions of any contract made by such licensee in connection with the sale or exchange of any motor vehicle and shall not violate any of the provisions of law relating to the conduct of the business for which it is licensed.
The State requires a Car Dealer bond for each license you hold:
$25,000 surety bond for New and Used Motor Vehicle Dealers, Public Consignment Auction Dealers
There are 3 parts to a MVD surety bond. The Principal "YOU", The Surety Company, and the Obligee. The Principal is the business or individual applying for the MVD Surety Bond. The Obligee is the individual or entity requiring the Surety Bond and the Surety Company is the company who provides the Surety Bond coverage.
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Before the issuance of a motor vehicle dealer's license, as provided by law, the applicant for the license shall furnish a continuous surety bond executed by the applicant as principal and executed by a surety company, licensed and qualified to do business within the state of North Dakota, which bond must run to the state of North Dakota, be in the amount of twenty-five thousand dollars and be conditioned upon the faithful compliance by the applicant as a dealer, if the license is issued to the dealer, that such dealer will comply with all of the statutes of the state of North Dakota regulating or being applicable to the business of the dealer as a dealer in motor vehicles, and indemnifying any person dealing or transacting business with the dealer in connection with any motor vehicle from any loss or damage occasioned by the failure of the dealer to comply with any of the provisions of this title, including the furnishing of a proper and valid certificate of title to the motor vehicle involved in any such transaction, and that the bond shall be filed with the director prior to the issuance of license provided by law. The aggregate liability of the surety of all persons, however, may in no event exceed the amount of the bond. Any third party sustaining injury within the terms of the bond may proceed against the principal and surety without making the state a party to the proceedings. The bond may be canceled by the surety, as to future liability, by giving written notice by certified mail, addressed to the principal at the address stated in the bond, and to the department. Thirty days after the mailing of the notice, the bond is null and void as to any liability thereafter arising. The surety remains liable, subject to the terms, conditions, and provisions of the bond until the effective date of the cancellation.