North Carolina used dealer bonds.
$400 flat.
Also known as the North Carolina auto dealer bond or car dealer bond.
North Carolina will not license a used motor vehicle dealer until a $50,000 surety bond for the established salesroom is on file with the Division of Motor Vehicles under G.S. 20-288(e), on the DMV’s own form LT-409. Ours is $400 flat.
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How much does a North Carolina used dealer bond cost?
$400 at the $50,000 amount, the same for every applicant.
Three steps to a licensed lot.
The DMV Dealer Unit will not process your license application without the bond, so dealers usually buy it first. The whole process:
Apply online
Entity details, years in business, your dealer number if you already have one, the effective date — plus a handful of commercial questions and a one-time consent to a soft credit pull.
Pay & e-sign
Dealer bonds like this are among the thousands of bond types that issue right after purchase. Issued when you pay. If the soft credit check needs a second look, one to two business days at most; it never affects your score.
File with the DMV
Your executed LT-409 and power of attorney arrive by email, ready to file with the License & Theft Bureau’s Dealer Unit with the rest of your dealer packet. Wet-ink original mailed on request.
What it is and who needs it.
What the dealer bond actually guarantees
North Carolina licenses motor vehicle dealers through the DMV License & Theft Bureau under Article 12 of Chapter 20, the Motor Vehicle Dealers and Manufacturers Licensing Law. G.S. 20-288(e) makes every approved dealer furnish a corporate surety bond — or a cash bond or fixed-value equivalent — of $50,000 for one established salesroom, plus $25,000 for each additional salesroom. This page is the $50,000 main-salesroom bond; if you are adding a second lot, that one is the $25,000 supplemental filing.
The bond is conditioned that you will faithfully conform to and abide by the dealer licensing law and Article 15, the Vehicle Mileage Act — so odometer violations reach it just as title failures do. Any purchaser of a vehicle, including another dealer, who suffers loss because a license holder failed to deliver free and clear title or otherwise violated those articles may sue the dealer and the surety directly. A dealer served with such an action has 10 days to notify the Commissioner.
It is not insurance for you — if the surety pays a claim, you repay the surety. The bond is designed to stay continuous: a surety cannot cancel it unless you stop doing business or your license is denied, suspended or revoked, and then only on 30 days’ written notice to the Commissioner, with liability already accrued surviving the notice period. Two carve-outs matter — the subsection does not reach a license holder dealing only in trailers with an empty weight of 4,000 pounds or less, and manufactured-home dealers bond under G.S. 143-143.12 instead.
You need this bond if you are
Claims, renewal, filing, and what sets the price.
If a claim is made
A claim comes from the party the bond protects, the obligee named on the form, when the duty the bond guarantees is not met.
The surety investigates and pays a valid claim, up to the $50,000 bond amount. You then repay the surety: a surety bond is a guarantee of your performance, not insurance for you.
Renewal and term
The premium covers a one-year term from the effective date you choose; a longer term is the same price per year, chosen at checkout.
Renew before the expiry date to keep the bond in force: the license, permit or contract it backs expects continuous coverage.
How to file it
File with the DMV. Your executed LT-409 and power of attorney arrive by email, ready to file with the License & Theft Bureau’s Dealer Unit with the rest of your dealer packet. Wet-ink original mailed on request.
What sets the price
The premium is fixed at $400 at the $50,000 amount for every applicant: the carrier’s rate book prices this bond by the form, not by your credit or your business profile.
One soft credit pull, never a hard inquiry, and it never affects your score.
Where a check runs, it decides approval; the rate is the same for everyone approved.
One application, issued instantly.
These are the actual underwriting fields — entity details, your dealer number, a few commercial questions and a one-time soft credit pull. Submit once and most dealers are issued right away.
Start the application →Common questions.
Other North Carolina motor vehicle dealer bonds.
Not sure this is the one your license calls for? These are the other motor vehicle dealer bonds we write in North Carolina. Each has its own statute and bond amount.
Other North Carolina bonds.
The same bond in nearby states.
Been told you need a different amount?
Price and requirements checked on the carrier’s application, . Page updated .
The DMV is waiting on one document.
$400 flat, short application, executed LT-409 usually in the same sitting. Free until issued.