Auto dealer bond in North Carolina: amount and cost
North Carolina dealers file $50,000 for their first established salesroom and $25,000 more for each additional one.
Auto dealer bond premium in North Carolina
$375 to $750
estimated, per year, for a $50,000 bond
| Bond the state requires | $50,000 |
| Which amount | First established salesroom |
| Rate for credit 700 or higher | 0.75 % to 1.5 % a year |
| Term | 1 year, renewed yearly |
Estimate from published rate grids, not a quote. N.C.G.S. § 20-288(e). Amount read on the official page, October 22, 2026.
Compiled by Radif Partners · Method and sources · rule read October 22, 2026
North Carolina sets its dealer bond by the number of established salesrooms. General Statute 20-288(e) requires a bond of $50,000 for one established salesroom, and $25,000 more for each additional salesroom, so a dealer with three locations carries $100,000 of bond. The surety bond is filed with the Division of Motor Vehicles on form LT-409; a cash bond on form LT-408 is the alternative. The bond protects buyers and the state against a dealer's failure to deliver titles, pay liens or follow the dealer laws. Premiums follow the total amount and the owner's credit: on published dealer grids, about $375 to $750 a year for a single-salesroom dealer with a credit score of 700 or more, $1,250 to $2,500 between 600 and 649, and $3,750 to $5,000 under 550. Rule read on October 22, 2026.
The statute
G.S. 20-288(e) sets the bond at "fifty thousand dollars ($50,000) for one established salesroom" (North Carolina General Statutes), with $25,000 for each additional established salesroom. The word "established" matters: it refers to a permanent place of business that meets the state's requirements for a salesroom, not to a temporary sale site. Dealers adding a location declare it to the DMV and increase the bond at the same time, usually by a rider from the surety.
The DMV accepts the surety bond on form LT-409. A dealer can instead post a cash bond on form LT-408, depositing the full amount, which ties up $50,000 or more for the life of the license.
Bond for your number of salesrooms
Auto dealer bond premium in North Carolina
$500 to $1,500
| Bond the state requires | $50,000 |
| Which amount | First established salesroom |
| Rate for credit 650 to 699 | 1 % to 3 % a year |
| Term | 1 year, renewed yearly |
Locations and premiums
Because the amount grows with each salesroom, so does the premium. A dealer with two salesrooms carries $75,000, estimated at $563 to $1,125 a year with good credit. Some sureties write a single bond with the total amount; others add riders. Either way the premium is computed on the total.
Compared with other states
North Carolina's first-salesroom amount equals the $50,000 of Texas and California, but its per-location increments are closer to Georgia, where every location carries its own bond. New York grades by sales volume instead. The dealer bond overview has the full table.
Practical points
Buy the bond in the dealership's exact legal name, the one on the DMV application, and list each established salesroom it must cover. A dealer that closes a location can ask the surety to reduce the bond by $25,000, which lowers the premium at the next billing. The bond is continuous, so it stays in force across license renewals until cancelled, and a cancellation notice gives the dealer a short window to replace it before the license is at risk. Owners with weaker credit should expect the surety to ask about their experience in vehicle sales and the source of their inventory financing.
The North Carolina rule as read
| Item | Value |
|---|---|
| First established salesroom | $50,000 |
| Each additional salesroom | $25,000 |
| Rule | N.C.G.S. § 20-288(e) |
| Line read | “fifty thousand dollars ($50,000) for one established salesroom” |
| Page | www.ncleg.gov |
| Read on | October 22, 2026 |