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North Dakota Car Loan Laws

North Dakota sets no rate ceiling on dealer financing, has no doc fee rule, and lets a lender repossess without a warning period once you default.

Updated By Lenditia Editorial Team 5-minute read No right to cure

In short

North Dakota's Retail Installment Sales Act requires clear contract disclosures but sets no maximum finance charge, and it covers only sales with a cash price of $25,000 or less. Late charges under that act are capped at 10% of the payment or $10, whichever is less. No state law limits a dealer's documentary fee. Instead of sales tax you pay a 5% motor vehicle excise tax on the price minus your trade-in. There is no right to cure before repossession. The Department of Financial Institutions licenses money brokers and other nonbank lenders.

Right to cure
None in state law
Rate ceiling
No state cap
Doc fee limit
No cap in state law
Vehicle sales tax
5% excise tax
Map of the United States with North Dakota highlighted

North Dakota car-finance rules at a glance

North Dakota No right to cure No general right to cure in state law Checked Oct 26, 2026
Right to cure
None; repossession may follow any default
Rate ceiling
No general cap on dealer contracts
NDCC 51-13 sets no rate and covers only sales of $25,000 or less; banks and credit unions follow their own rules.
Doc fee limit
No cap in state law
After repossession
Notice before sale; you may redeem; deficiency allowed
Vehicle sales tax
5% motor vehicle excise tax on the price minus trade-in
Regulator
North Dakota Department of Financial Institutions

What a North Dakota car contract may charge

Chapter 51-13 of the North Dakota Century Code governs the retail installment contract you sign when a dealer finances the sale. Section 51-13-03 lets the seller charge a finance charge on the principal balance but names no maximum rate, and a seller that follows the disclosure rules is treated as a regulated lender. The chapter does not apply when the cash price is over $25,000 or the purchase is mainly for business or farm use.

  • Late charge. Once a payment is more than 10 days late, the contract may add 10% of that payment or $10, whichever is less, and only once per installment.
  • No surprise acceleration. If you are not in default, the holder may not call the whole balance due arbitrarily and without reasonable cause.
  • Your rights stay in the contract. A contract may not waive your claims for illegal acts during collection or repossession, or make the seller your agent for a repossession.
  • Penalty. A seller that willfully breaks the contract or charge rules cannot collect any finance, late or collection charge on that contract.

With no rate ceiling, a quote from a bank or credit union is your best check on a dealer's offer. Our guide to getting preapproved shows how to get one.

Fees and the motor vehicle excise tax

  • Doc fee. Neither the dealer licensing law (chapter 39-22) nor the installment sales act sets a limit or a disclosure rule for a dealer's documentary fee. Ask for it in writing before you negotiate.
  • Official fees. Title, license and registration fees paid to the state must be shown on the contract as official fees.
  • Excise tax. North Dakota charges a 5% motor vehicle excise tax on the purchase price, whether you buy in the state or bring the vehicle in from elsewhere (NDCC 57-40.3-02).
  • Trade-in credit. The value of a trade-in is deducted from the selling price before the tax is figured, and so are manufacturer incentives that cut what you pay at the sale.

What happens if you fall behind in North Dakota

North Dakota law does not give car buyers a notice and a set number of days to catch up before repossession. Once your contract treats you as in default, the lender may take the car without a court order under the state's version of the Uniform Commercial Code, chapter 41-09, as long as it does not breach the peace. Your installment contract must tell you about your right to redeem a repossessed car and, in some cases, to require that it be resold.

  1. Repossession. The car may be taken without warning, but the agent may not breach the peace, for example with force or threats.
  2. Notice before the sale. The lender must send you a written notice before it sells the car, and the sale must be commercially reasonable.
  3. Redemption. Until the sale, you can get the car back by paying the full balance plus the lender's reasonable repossession costs.
  4. The deficiency or surplus. If the sale brings less than you owe, you remain liable for the rest; if it brings more, the extra belongs to you.

Our guides to repossession and the balance left after a sale explain what to check in the lender's notices.

Where to check a lender and complain

North Dakota licenses nonbank lenders and loan arrangers as money brokers through the Department of Financial Institutions. A dealer that finances its own inventory is exempt from that license, and the attorney general or a state's attorney may enforce the installment sales act. Payday and title-loan rules are on Lendmira's North Dakota page.

Department of Financial Institutions

Licenses money brokers, including nonbank lenders that make or arrange loans for North Dakota residents.

North Dakota Attorney General

Can enforce the Retail Installment Sales Act and takes complaints about dealer sales practices.

Consumer Financial Protection Bureau

Takes complaints about any auto lender or servicer, including banks and finance companies.

Questions people ask

Is there a maximum interest rate on a car loan in North Dakota?

Not for dealer contracts. The Retail Installment Sales Act requires the finance charge to be disclosed but sets no cap, and it does not cover sales over $25,000.

How much can a North Dakota dealer charge for a doc fee?

State law sets no limit. Ask the dealer to list the fee in writing and compare it with other dealers.

Do I pay sales tax on a car in North Dakota?

You pay a 5% motor vehicle excise tax instead, figured on the purchase price minus your trade-in.

Do I get a warning before my car is repossessed in North Dakota?

Not by law. The lender can repossess after a default without advance notice, but it must notify you before selling the car. See what to do when you fall behind.

Sources

Facts on this page were checked against these sources on October 26, 2026. North Dakota's installment sales act applies only to sales with a cash price of $25,000 or less.

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