NC FIRST Commission - Issue Brief: Edition 6 Update - Sustainable Transportation

Sep 20, 2026

Uploaded by Bintang

NC FIRST Commission Edition 6 update outlines how North Carolina’s DMV fees are collected and how future mobility shifts could reduce collected revenue. It explains DMV fee categories and their deposit into the Highway Fund and Highway Trust Fund supporting NCDOT’s operations and capital program. The brief reviews FY 2020 license, registration, and inspection volumes, notes COVID-related revenue timing changes, and analyzes inflation adjustments affecting near- and longer-term revenue stability.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages4

Reading Time10 min

AccessFree to download

N.C. Division of Motor Vehicle Fees

Overview

How Do DMV Fees Work?

What is the REAL ID Act?

Annual vehicle registrations

ISSUE BRIEF: EDITION 6 UPDATE COMMISSION FUTURE INVESTMENT RESOURCES FOR @invest_nc [ncdot.gov/ncfirst](ncdot.gov/ncfirst) SUSTAINABLE TRANSPORTATION The NC FIRST Commission was created in March 2019 to evaluate North Carolina’s transportation investment needs. Their job is to advise the Secretary of Transportation of new or better ways to ensure that critical financial resources are available in the future. As part of this process, we’ll be looking for input from you, the people of North Carolina! This brief overviews fees collected by the Division of Motor Vehicles (DMV) and how shifting mobility preferences, technological advancements, and population changes may reduce these fees in the future. N.C. Division of Motor Vehicle Fees Overview The North Carolina DMV collects numerous fees that enable you to lawfully operate a vehicle (Figure 1) . The primary DMV fees are driver license fees, vehicle titling fees, and vehicle registration and inspection fees. This brief focuses on license, registration, and inspection fees. DMV fees are deposited into the Highway Fund to support maintenance and operations and into the Highway Trust Fund to support NCDOT’s capital program. In FY 2020, DMV processed more than 1.4 million original and renewal driver license issuances and registered 8,251,423 million vehicles, with DMV fees providing 21.4 percent of the state’s total revenues for transportation investment. Due to the COVID-19 pandemic, DMV revenues are 3.6 percent lower than in FY 2019. The revenue loss is related to the five-month extension (from March 1 to August 1) for citizens to renew and pay for driver licenses, vehicle inspections, and vehicle registrations.1 Revenues will therefore be higher in FY 2021 due to delayed payments from the filing extension, plus the inflationary adjustment that went into effect on July 1, 2020,2 even though the number of DMV transactions is forecast to remain steady. DMV fee revenue will continue to grow in the near term due to ongoing inflationary adjustments, but its long-term stability is questionable. | FY 2020 Division of
Motor Vehicle Fees $888.4 Million Total | | | --- | --- | | 24.1 %
Highway Fund Revenues
8.9%
Highway Trust Fund Revenues | $750.1
Million
$138.3
Million | Figure 1: DMV Fees Deposited in Highway Fund and Highway Trust Fund | Highway Fund Highway Trust Fund | | | --- | --- | | Driver License | Vehicle Title | | Vehicle Registration | Misc . Registration | | Safety Inspection | Lien Recording | | Emissions Inspection | | | Dealer | | | Lien Recording | | | Hearings | | | Internat'l Registration Plan | | | Motor Carrier | | | Restoration | | 1 2020 N.C. Sess. Laws, Chap. 2020-3, §4 .7(b) 2 2015 N.C. Sess. Laws, Chap. 2015-241 (N.C. Gen. Stat. §20-4 .02) ~~ ~~ NC FIRST Commission ~~ ~~ N.C. DMV FEES FY 2019-20 UPDATE SEPTEMBER 2020 @invest_nc [ncdot.gov/ncfirst](ncdot.gov/ncfirst) How Do DMV Fees Work? Unlike the revenues generated from motor fuels and highway use taxes, DMV fees are less impacted by the state’s economic condition. During economic downturns, households may reduce travel and delay trading vehicles, but individuals generally tend to maintain ownership of their vehicles. As a result, revenues from DMV fees remain consistent with minimal annual growth. The legislature raised most DMV fees by 30 percent in the 2015 budget. Revenue increases in Figure 2 and Figure 3 are attributable to this fee increase. The law also authorized DMV to apply an inflationary increase to DMV fees every four years, beginning on July 1, 2020.3 The first inflationary adjustment increased fees by 7.8 percent. The next fee adjustment will occur on July 1, 2024. Driver licenses.4 DMV issues three classes of individual and commercial driver licenses, an ID card, and three types of learner permits for teenagers, commercial drivers, and motorcyclists. The most common license issued is a Class A license. Prior to 2006, the

FAQs

What is the purpose of the NC FIRST Commission brief?

It provides an overview of DMV fees and explains how future changes in mobility preferences, technology, and population may reduce these fees over time.

Where do DMV fees go in North Carolina?

DMV fees are deposited into the Highway Fund for maintenance and operations and into the Highway Trust Fund to support NCDOT’s capital program.

How did COVID-19 affect DMV revenue timing in FY 2020?

DMV revenues were 3.6% lower than FY 2019 due to a five-month extension for citizens to renew and pay for driver licenses, inspections, and registrations.

Sep 20, 2026

Uploaded by Bintang