§ 20-288. Application for license; license requirements; expiration of license; bond.
§ 20‑288. Applicationfor license; license requirements; expiration of license; bond.
(a) A new motor vehicledealer, motor vehicle sales representative, manufacturer, factory branch,factory representative, distributor, distributor branch, distributor representative,or wholesaler may obtain a license by filing an application with the Division.An application must be on a form provided by the Division and contain theinformation required by the Division. An application for a license must beaccompanied by the required fee and by an application for a dealer licenseplate.
(a1) A used motor vehicledealer may obtain a license by filing an application, as prescribed insubsection (a) of this section, and providing the following:
(1) The required fee.
(2) Proof that theapplicant, within the last 12 months, has completed a 12‑hour licensingcourse approved by the Division if the applicant is seeking an initial licenseand a six‑hour course approved by the Division if the applicant isseeking a renewal license. The requirements of this subdivision do not apply toa used motor vehicle dealer the primary business of which is the sale ofsalvage vehicles on behalf of insurers or to a manufactured home dealerlicensed under G.S. 143‑143.11 who complies with the continuing educationrequirements of G.S. 143‑143.11B. The requirement of this subdivisiondoes not apply to persons age 62 or older as of July 1, 2002, who are seeking arenewal license. This subdivision also does not apply to an applicant who holdsa license as a new motor vehicle dealer as defined in G.S. 20‑286(13) andoperates from an established showroom one mile or less from the establishedshowroom for which the applicant seeks a used motor vehicle dealer license. Anapplicant who also holds a license as a new motor vehicle dealer may designatea representative to complete the licensing course required by this subdivision.
(3) If the applicant isan individual, proof that the applicant is at least 18 years of age and proofthat all salespersons employed by the dealer are at least 18 years of age.
(4) The application fora dealer license plate.
(b) The Division shallrequire in such application, or otherwise, information relating to matters setforth in G.S. 20‑294 as grounds for the refusing of licenses, and toother pertinent matters commensurate with the safeguarding of the publicinterest, all of which shall be considered by the Division in determining thefitness of the applicant to engage in the business for which he seeks alicense.
(c) All licenses thatare granted shall be for a period of one year unless sooner revoked orsuspended. The Division shall vary the expiration dates of all licenses thatare granted so that an equal number of licenses expire at the end of eachmonth, quarter, or other period consisting of one or more months to coincidewith G.S. 20‑79(c).
(d) To obtain a licenseas a wholesaler, an applicant who intends to sell or distribute self‑propelledvehicles must have an established office in this State, and an applicant whointends to sell or distribute only trailers or semitrailers of more than 2,500pounds unloaded weight must have a place of business in this State where therecords required under this Article are kept.
To obtain a license as a motorvehicle dealer, an applicant who intends to deal in self‑propelledvehicles must have an established salesroom in this State, and an applicant whointends to deal in only trailers or semitrailers of more than 2,500 poundsunloaded weight must have a place of business in this State where the recordsrequired under this Article are kept.
An applicant for a license asa manufacturer, a factory branch, a distributor, a distributor branch, awholesaler, or a motor vehicle dealer must have a separate license for eachestablished office, established salesroom, or other place of business in thisState. An application for any of these licenses shall include a list of theapplicant's places of business in this State.
(e) Each applicantapproved by the Division for license as a motor vehicle dealer, manufacturer,factory branch, distributor, distributor branch, or wholesaler shall furnish acorporate surety bond or cash bond or fixed value equivalent of the bond. Theamount of the bond for an applicant for a motor vehicle dealer's license isfifty thousand dollars ($50,000) for one established salesroom of the applicantand twenty‑five thousand dollars ($25,000) for each of the applicant'sadditional established salesrooms. The amount of the bond for other applicantsrequired to furnish a bond is fifty thousand dollars ($50,000) for one place ofbusiness of the applicant and twenty‑five thousand dollars ($25,000) foreach of the applicant's additional places of business.
A corporate surety bond shallbe approved by the Commissioner as to form and shall be conditioned that theobligor will faithfully conform to and abide by the provisions of this Articleand Article 15. A cash bond or fixed value equivalent thereof shall be approvedby the Commissioner as to form and terms of deposits as will secure the ultimatebeneficiaries of the bond; and such bond shall not be available for delivery toany person contrary to the rules of the Commissioner. Any purchaser of a motorvehicle, including a motor vehicle dealer, who shall have suffered any loss ordamage by the failure of any license holder subject to this subsection todeliver free and clear title to any vehicle purchased from a license holder orany other act of a license holder subject to this subsection that constitutes aviolation of this Article or Article 15 of this Chapter shall have the right toinstitute an action to recover against the license holder and the surety. Everylicense holder against whom an action is instituted shall notify theCommissioner of the action within 10 days after served with process. Except asprovided by G.S. 20‑288(f) and (g), a corporate surety bond shall remainin force and effect and may not be canceled by the surety unless the bondedperson stops engaging in business or the person's license is denied, suspended,or revoked under G.S. 20‑294. That cancellation may be had only upon 30days' written notice to the Commissioner and shall not affect any liabilityincurred or accrued prior to the termination of such 30‑day period. Thissubsection does not apply to a license holder who deals only in trailers havingan empty weight of 4,000 pounds or less. This subsection does not apply tomanufacturers of, or dealers in, mobile or manufactured homes who furnish acorporate surety bond, cash bond, or fixed value equivalent thereof, pursuantto G.S. 143‑143.12.
(f) A corporate suretybond furnished pursuant to this section or renewal thereof may also be canceledby the surety prior to the next premium anniversary date without the priorwritten consent of the license holder for the following reasons:
(1) Nonpayment ofpremium in accordance with the terms for issuance of the surety bond; or
(2) An act or omissionby the license holder or his representative that constitutes substantial andmaterial misrepresentation or nondisclosure of a material fact in obtaining thesurety bond or renewing the bond.
Any cancellation permitted bythis subsection is not effective unless written notice of cancellation has beendelivered or mailed to the license holder and to the Commissioner not less than30 days before the proposed effective date of cancellation. The notice must begiven or mailed by certified mail to the license holder at its last knownaddress. The notice must state the reason for cancellation. Cancellation fornonpayment of premium is not effective if the amount due is paid before theeffective date set forth in the notice of cancellation. Cancellation of thesurety shall not affect any liability incurred or accrued prior to thetermination of the 30‑day notice period.
(g) A corporate suretymay refuse to renew a surety bond furnished pursuant to this section by givingor mailing written notice of nonrenewal to the license holder and to theCommissioner not less than 30 days prior to the premium anniversary date of thesurety bond. The notice must be given or mailed by certified mail to thelicense holder at its last known address. Nonrenewal of the surety bond shallnot affect any liability incurred or accrued prior to the premium anniversarydate of the surety bond. (1955, c. 1243, s. 4; 1975, c. 716, s. 5; 1977, c.560, s. 2; 1979, c. 254; 1981, c. 952, s. 3; 1985, c. 262; 1991, c. 495, s. 1;c. 662, s. 3; 1993, c. 440, s. 3; 1997‑429, s. 1; 2001‑345, s. 2;2001‑492, s. 4; 2003‑254, s. 2; 2004‑167, s. 9; 2004‑199,s. 59; 2005‑99, s. 2; 2006‑105, s. 2.3; 2006‑191, s. 1; 2006‑259,s. 12.)