# Title 39 — Motor Vehicles

## Chapter 39-22 — Motor Vehicle Dealer Licensing

### § 39-22-01. Dealer defined.

Repealed by S.L. 1987, ch. 439, § 2.
### § 39-22-02. Motor vehicle dealer's license - Fees - Additional number plates.

Repealed by S.L. 2001, ch. 337, § 19.
### § 39-22-03. Motorcycle dealer's license - Fees.

Repealed by S.L. 1983, ch. 451, § 2.
### § 39-22-04. Grounds for denial, suspension, cancellation, or revocation of dealer's

license.
The director may deny an application for a dealer's license or suspend, revoke, or cancel a
dealer's license after it has been granted for making any material misstatement by an applicant
in the application for the license; willfully failing to comply with the provisions of this chapter or
with any rule adopted by the director; knowingly permitting any person to sell or exchange, or
offer or attempt to sell or exchange any motor vehicle except for the licensed motor vehicle
dealer by whom the person is employed; willfully violating a law relating to the sale, distribution,
or financing of motor vehicles; having ceased to have an established place of business; or
having violated any state or federal law relating to alteration of odometers or vehicle
identification number.
### § 39-22-05. Bond required.

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.
### § 39-22-05.1. Disposition of fees.

Fees from registration of dealers and fees collected from dealers found in violation of this
chapter must be deposited with the state treasurer, credited to the dealer enforcement fund, and
used exclusively for enforcement of this chapter.
### § 39-22-05.2. When bid bonds not required in bids to state or political subdivisions.

A person who submits a bid to the state, any of its agencies, or any of its political
subdivisions to sell any type of motor vehicle is not required to submit a bidder's bond or a
certified or cashier's check if that person is already bonded pursuant to section 39-22-05. If the

buyer requires a performance bond, then within ten days of the awarding of the contract, the
successful bidder shall submit a performance bond to the appropriate state agency or political
subdivision in an amount equal to the contract price.
### § 39-22-06. Motor vehicle lots - Location.

A licensed dealer may establish secondary motor vehicle lots in the conduct of the dealer's
business within five miles [8.05 kilometers] of the dealer's established place of business.
Secondary lots must be identified as a part of the licensed dealer's operation with a sign
displaying the name and telephone number of the licensed dealer. The sign must be at least
thirty-two square feet [2.97 square meters] in size, contain the name of the dealership in letters
at least ten inches [25.4 centimeters] high, and be clearly visible from the street. A licensed
dealer may not display vehicles except on the dealer's primary and secondary lots or as
otherwise permitted in this chapter. The department may assess a person violating this section
a one hundred dollar fee for a first violation and a two hundred dollar fee for a second violation
within two years of the first violation. The department shall assess a fee of at least five hundred
dollars but not more than two thousand dollars for a third or subsequent violation within five
years of the first violation.
### § 39-22-07. Dealer permitting license to be used by another dealer - License revoked -

Penalty.
Repealed by S.L. 2001, ch. 337, § 19.
### § 39-22-07.1. Motor vehicle sales prohibited on Sunday - Penalty.

A motor vehicle dealer may not sell a motor vehicle on Sunday. A violation of this section is
a class B misdemeanor.
### § 39-22-08. Dealers to furnish information to director.

Repealed by S.L. 2001, ch. 337, § 19.
### § 39-22-09. Dealer to file list of used motor vehicles with registrar - Fees paid on used

cars by dealer - Delinquency - Penalty.
Repealed by S.L. 1977, ch. 369, § 1.
### § 39-22-10. Powers of the director.

In addition to other powers provided by law, the director has the following powers and duties
which must be exercised in conformity with this chapter:
1. To cancel, revoke, or suspend a dealer's license as provided for in section 39-22-04.
2. To prescribe rules and regulations not inconsistent with this chapter governing the
application for dealer's licenses and the cancellation or suspension or revocation of
dealer's licenses.
3. To employ and pay such persons as the director may deem necessary to inspect
dealers in this state, investigate dealers for the information of the director, to procure
evidence in connection with any prosecution or other action to suspend, revoke, or
cancel a dealer's license in relation to any matter in which the director has any duty to
perform.
### § 39-22-11. Examination of books and records.

The director or any duly authorized representative may inspect the pertinent books, letters,
records, and contracts of any licensed motor vehicle dealer or any other person relating to any
complaint made against such dealer or person and held to be in violation of any of the
provisions of this title. In addition, any duly authorized representative of the department may
inspect the records of any licensed dealer to verify that fees collected for the department have
been properly remitted.

### § 39-22-12. Officers to administer chapter - House car dealer, manufacturer, and

distributor exemption.
The director and any duly authorized representative are responsible for the administration of
this chapter. This chapter does not apply to house car dealers, manufacturers, and distributors.
### § 39-22-13. Penalty for violation of chapter.

Any person violating any of the provisions of this chapter for which another penalty is not
specifically provided is guilty of a class B misdemeanor.
### § 39-22-14. Motor vehicle dealer license - Fees - Penalty.

1. A person may not engage in the business of buying, selling, or exchanging of motor
vehicles without possessing a current motor vehicle dealer license. A person may not
advertise or otherwise hold out to the public as engaging in the buying, selling, or
exchanging of motor vehicles for resale without possession of a current new motor
vehicle dealer license or used motor vehicle dealer license.
2. The motor vehicle dealer license fee is one hundred dollars per year and for which the
department shall issue one dealer plate. The applicant for an initial new or used motor
vehicle dealer license shall submit with the application a nonrefundable fee of one
hundred dollars for the initial inspection. The applicant shall provide the business's
federal employer identification number or, in the case of an application from an
individual, the individual's social security number.
3. A motor vehicle dealer licensed under this chapter may buy, sell, or exchange:
a. A motor-powered recreational vehicle if the dealer maintains a surety bond that
fulfills the requirements of section 39-22.3-05 and collects and timely transmits
any applicable snowmobile safety and off-highway safety fees; and
b. A trailer if the dealer maintains a surety bond that fulfills the requirements of
section 39-22.1-02.
4. A vehicle sold under subsection 3 does not count toward the minimum sales
requirement under section 39-22-18.
5. The department may assess a person violating this section a one hundred dollar fee
for a first violation, a two hundred dollar fee for a second violation within two years of
the first violation, or a fee of at least five hundred dollars but not more than two
thousand dollars for a third or subsequent violation within five years of the first
violation. Any person not licensed as a dealer under this section who has been
previously found to be in violation of this section, and assessed the fees specified, is
guilty of a class B misdemeanor if a third or subsequent violation occurs.
### § 39-22-15. Established place of business - Penalty.

1. A dealer license may not be issued until the applicant furnishes proof satisfactory to
the director that the applicant has, does, and will continue to maintain in North Dakota
an established place of business adjacent to the primary motor vehicle display lot
maintained by the dealer. An established place of business means a permanent
enclosed building of at least two hundred fifty square feet [23.22 square meters] either
owned, rented, or leased at which a permanent business of bartering, trading, and
selling of motor vehicles will be conducted and does not mean a residence, tents,
temporary stands, or other temporary quarters. The established place of business and
primary motor vehicle display lot must cover at least two thousand five hundred square
feet [232.26 square meters] and be located on property zoned or otherwise approved
for this purpose by the appropriate zoning authority. The established place of business
must be adequately heated and lighted so as to be comfortable for customers and
employees and be equipped with standard office equipment necessary for the conduct
of the business. All records related to the business, including titles or other documents
showing ownership of the vehicles, must be kept and maintained at the established
place of business, or if multiple dealer licenses are held by a person, records may be
kept and maintained at one established place of business for that person.

2. An established place of business must have a telephone publicly listed in the name of
the dealership, be open to the public during normal business hours, and have a sign
identifying the business to the public as a motor vehicle dealership. The sign must be
at least thirty-two square feet [2.97 square meters] in size, contain the name of the
dealership in letters at least ten inches [25.4 centimeters] high, and be clearly visible
from the street. A business sign approved by a motor vehicle manufacturer may be
used in lieu of the sign requirements of this section.
3. If the licensee desires to move from the established place of business occupied when
the license was granted to a new location, the licensee shall first secure from the
director permission to do so. The licensee must furnish proof satisfactory to the
director that the premises to which the licensee proposes to move conform with the
requirements of this section.
4. The department may assess a person violating this section a one hundred dollar fee
for a first violation or a two hundred dollar fee for a second violation within two years of
the first violation. The department may suspend the license of a motor vehicle dealer
licensed under this chapter if a third or subsequent violation of this section occurs
within five years of the first violation.
### § 39-22-16. Application for new motor vehicle dealer license - Franchise required -

Selling vehicles without a franchise - Penalty.
1. In an application for a new motor vehicle dealer license, the applicant shall furnish
proof satisfactory to the director that the applicant has a bona fide contract or franchise
in effect with a manufacturer or distributor of the new motor vehicle or motor vehicles
in which the dealer proposes to deal. A new motor vehicle dealer license entitles the
holder to deal in both used motor vehicles and in those new motor vehicles only for
which the dealer has a bona fide contract or franchise in effect with a manufacturer or
distributor. A used motor vehicle dealer license entitles the holder to deal in used motor
vehicles only.
2. New motor vehicle dealers who have been issued surrounding communities as a part
of their dealer area of responsibility may be issued additional new motor vehicle dealer
licenses if the manufacturer provides the department written approval of additional
sites for display and sale of motor vehicles. Applicants for additional new car dealer
licenses must meet all of the requirements of this chapter.
3. If a motor vehicle dealer purchases or holds for sale a new motor vehicle for which the
dealer does not have a bona fide contract or franchise in effect with a manufacturer or
distributor, the new motor vehicle becomes, at the time of purchase or possession,
subject to the registration provisions of chapter 39-04, the title registration provisions
of chapter 39-05, and the motor vehicle excise tax provisions of chapter 57-40.3.
4. The department may assess a person violating this section a two hundred fifty dollar
fee for a first violation or a five hundred dollar fee for a second violation within two
years of the first violation. The department may suspend the license of a motor vehicle
dealer licensed under this chapter if a third or subsequent violation of this section
occurs within five years of the first violation.
### § 39-22-17. Additional dealer plates - In-transit plates - Demonstration plates - Fees -

Use of dealer plates - Penalty.
1. Additional dealer number plates must be issued to the dealer upon payment of a fee of
twenty dollars each. A dealer number plate may be used on any vehicle owned by the
dealership and used in the direct functions of demonstrating, buying, or selling
vehicles. Dealer plates may not be used on a service vehicle or a vehicle used in other
functions of the business, sold units in the possession of the purchaser, by family
members not residing at the dealer's residence, or by a person not directly involved in
the operation of the dealership.
2. A dealer plate displayed on a vehicle must be visibly displayed on the rear of the
vehicle.

3. The department may assess a person violating this section a one hundred dollar fee
for a first violation, a two hundred dollar fee for a second violation within two years of
the first violation, or a fee of at least five hundred dollars but not more than two
thousand dollars for a third or subsequent violation within five years of the first
violation.
### § 39-22-18. Renewal of dealer license - Fees - Minimum sales requirement - Penalty.

A dealer license issued under this chapter expires on December thirty-first of each year. A
licensed dealer may apply for renewal of the dealer's license on forms prescribed by the
department and payment of the dealer license and dealer plate fees required by this chapter.
The department may not renew the dealer license of any applicant who has made less than
eight retail motor vehicle sales during the previous year. The department may adopt
administrative rules to limit the number of dealer plates available to an applicant based on the
applicant's motor vehicle sales history. Any dealer who fails to submit a renewal application
before the expiration of the dealer's current license, in addition to all other fees due, shall pay a
one hundred dollar fee at the time the dealer's license is renewed. For purposes of this section,
"retail motor vehicle sales" means the sale of a motor vehicle that requires titling and
registration in order to operate on the roads.
### § 39-22-19. Garage liability insurance requirement.

Before the issuance of a motor vehicle dealer license, the applicant must provide proof to
the department of a continuous policy of liability insurance for the business operation of the
applicant which includes general, business automobile, and sales, repair, or service operations
liability as is appropriate to the business operation. The insurance company that issued the
policy must notify the department of any cancellation, suspension, or revocation of the
coverage. Any motor vehicle dealer who fails to maintain the insurance coverage required by
this section shall return the dealer license and dealer number plates to the department on or
before the effective date of the cancellation, suspension, or revocation. Failure to return the
dealer license or dealer number plates results in automatic revocation by operation of law. The
department may order the superintendent to take possession of any dealer license or dealer
number plates not returned to the department as required in this section. The department shall
reinstate the dealer license and dealer number plates only when proof of insurance coverage is
received.
### § 39-22-20. Display and sale of vehicles by out-of-state dealers - Offsite display and

sale by instate dealers - Penalty.
1. An out-of-state motor vehicle dealer who possesses a current motor vehicle dealer
license from the dealer's home jurisdiction may participate in bona fide North Dakota
automobile shows and sales promotions after obtaining a permit from the department.
The permit must be issued upon the payment of a fee of one hundred dollars and is
valid for a period of time, not to exceed seven days, to be determined by the
department.
2. A motor vehicle dealer licensed under this chapter may participate in bona fide
automobile shows and sales promotions in this state after obtaining a permit from the
department. The permit must be issued upon the payment of a fee of twenty-five
dollars and is valid for a period of time, not to exceed seven days, to be determined by
the department.
3. The department shall deny an application for a permit if it determines the applicant
does not intend to participate in a bona fide show or promotion.
4. The department may assess a person violating this section a one hundred dollar fee
for a first violation, a two hundred dollar fee for a second violation within two years of
the first violation, or a fee of at least five hundred dollars but not more than two
thousand dollars for a third or subsequent violation within five years of the first
violation.

### § 39-22-21. Consignment vehicles - Penalty.

1. A motor vehicle dealer may sell a motor vehicle consigned to the dealer by a motor
vehicle owner, except when the owner is a licensed motor vehicle dealer, under the
terms of a consignment contract between the owner and the dealer. However, a motor
vehicle dealer may sell a collector motor vehicle consigned to the dealer by an owner
that is a licensed motor vehicle dealer. The consignment contract form must specify
the terms of the agreement between the owner and the dealer, specify the location of
the motor vehicle certificate of title, and must be approved by the department.
2. The department may assess a person violating this section a one hundred dollar fee
for a first violation, a two hundred dollar fee for a second violation within two years of
the first violation, or a fee of at least five hundred dollars but not more than two
thousand dollars for a third or subsequent violation within five years of the first
violation.
### § 39-22-22. Operators of motor vehicle display lots - Permit required - Fee - Records

required - Penalty.
1. A person not licensed as a motor vehicle dealer may operate display lots on which the
owner of a vehicle may display the vehicle for sale. The display lot must be located on
property zoned or otherwise approved for this purpose by the appropriate zoning
authority. The display lot operator must obtain an annual permit from the department to
operate the lot. The annual fee for the permit is fifty dollars.
2. The display lot operator must provide the department with proof of a liability insurance
policy with a minimum coverage of three hundred thousand dollars. The display lot
must have a prominent sign identifying the business and the telephone number of the
business owner. The sign must be at least thirty-two square feet [2.97 square meters]
in size, contain the name of the display lot operator in letters at least ten inches [25.4
centimeters] high, and be clearly visible from the street.
3. The display lot operator, before providing space to a vehicle owner, must verify that the
person renting the space is the owner of the displayed vehicle and keep records for at
least one year after the rental of a space verifying compliance with this requirement. A
licensed motor vehicle dealer may not operate a display lot on property that is part of
the licensed dealership. The department may inspect the records of the display lot
operator related to any complaint made against the operator.
4. The department may assess a person violating this section a one hundred dollar fee
for a first violation, a two hundred dollar fee for a second violation within two years of
the first violation, or a fee of at least five hundred dollars but not more than two
thousand dollars for a third or subsequent violation within five years of the first
violation.
### § 39-22-23. Auto auction operators - License required - Records required - Penalty.

1. A person may not operate a wholesale or retail auto auction business without being
licensed as a motor vehicle dealer. An auto auction operator must keep records related
to the seller and purchaser of all vehicles sold through the operator's business for at
least two years and make those records available to the director or an authorized
representative of the director upon reasonable request.
2. The department may assess a person violating this section a one hundred dollar fee
for a first violation and a two hundred dollar fee for a second violation within two years
of the first violation. The department may suspend the license of a motor vehicle
dealer licensed under this chapter if a third or subsequent violation of this section
occurs within five years of the first violation.
### § 39-22-24. Factory store prohibited - Penalty.

A manufacturer, importer, or distributor of new motor vehicles, or a subsidiary thereof, may
not own, operate, or control a motor vehicle dealership in this state. This section does not apply
if:

1. The ownership and operation is for a temporary period not to exceed one year during
the transition from one owner or operator to another;
2. The dealership is being sold under a bona fide contract or purchase option to the
operator of the dealership, or a contract exists under which the operator of the
dealership can expect to acquire full ownership of or a controlling interest in the
dealership, and after the transfer of ownership is completed the dealership will not be
owned, operated, or controlled by the manufacturer, importer, or distributor, or a
subsidiary thereof; or
3. The department determines there is no prospective independent dealer available to
own or operate the dealership in a manner consistent with the public interest and
meeting the requirements of this chapter.
Any person violating this section is guilty of a class A misdemeanor.
### § 39-22-25. Direct manufacturer sales prohibited - Penalty.

A manufacturer or franchiser may not offer to sell directly or sell indirectly, any new motor
vehicle to a consumer in this state, except through a new motor vehicle dealer holding a
franchise for the line make covering the new motor vehicle. This section does not apply to
manufacturer or franchiser sales of new motor vehicles to the federal government, charitable
organizations, or employees of the manufacturer or franchiser. Any person violating this section
is guilty of a class A misdemeanor.
### § 39-22-26. Brokering of motor vehicles prohibited - Penalty.

A person may not act as, offer to act as, or hold out to be a motor vehicle broker. As used in
this section, a broker is a person who, for a fee, commission, or other valuable consideration,
arranges or offers to arrange a transaction involving the sale or exchange of a motor vehicle,
and who is not:
1. A dealer or a bona fide agent or employee of a dealer;
2. A representative or a bona fide agent or employee of a manufacturer;
3. The bona fide owner of the motor vehicle involved in the transaction; or
4. A bona fide auctioneer conducting an auction involving motor vehicles not owned by
the auctioneer.
Any person violating this section is guilty of a class A misdemeanor.
### § 39-22-27. Collector motor vehicle auctions.

1. A person may engage in the business of conducting a collector motor vehicle auction
without obtaining a motor vehicle dealer's license as otherwise required by this chapter
if:
a. Each motor vehicle sold or offered for sale at the auction is a collector, antique, or
special interest vehicle;
b. The sale is open to the public;
c. The person conducts no more than two collector motor vehicle auctions per year;
d. The site of the auction is located on property zoned or otherwise approved for this
purpose by the appropriate zoning authority; and
e. The auction lasts no more than two days.
2. Collector motor vehicle auctions that comply with this section may be conducted any
day of the week and sections 39-22-07.1 and 39-22-20 do not apply to motor vehicle
dealers who participate in collector motor vehicle auctions.
3. A collector motor vehicle is a vehicle that is at least twenty-five years old; an antique
motor vehicle is a vehicle that is at least forty years old; and a special interest vehicle
is a vehicle that has an appreciating value because of rarity, originality, or limited
production of an anniversary edition.
