Arkansas Auto Dealer Bond

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Arkansas Auto Dealer Bond: A Comprehensive Guide

This guide provides information for insurance agents to help pre-owned car dealership owners on Arkansas Auto Dealer bonds

At a Glance:

  • Average Cost: $100 per year or $10 per month, based on the business owner’s credit
  • Bond Amount: $25,000
  • Who Needs It: All individuals and businesses that sell or deal in 5 or more used motor vehicles in a 12-month period
  • Purpose: To ensure the public will receive compensation for any damages should the auto dealer fail to comply with dealer licensing law
  • Who Regulates Dealers in Arkansas: The Arkansas Department of Public Safety, Arkansas State Police
Arkansas auto dealer bond
Arkansas Used Motor Vehicle Dealer, Wholesaler, or Auto Auction Bond Form


Arkansas Code 23-112-607 mandates used auto dealers operating in the state to obtain a motor vehicle dealer license with the Arkansas State Police. The Arkansas legislature enacted the license and regulations to ensure that dealers engage in ethical business practices and remit required taxes and fees. In order to provide financial security for the enforcement of the license law, dealers must purchase and maintain a $25,000 motor vehicle dealer surety bond to be eligible for licensure.

What is the Purpose of the Arkansas Auto Dealer Bond?

Arkansas requires dealers to purchase the Motor Vehicle Dealer Bond as part of the application process for the Motor Vehicle Dealer License. The bond ensures that the public will receive compensation for financial harm if the auto dealer fails to comply with the licensing regulations and that the dealer will pay all required taxes and fees to the State of Arkansas. In short, the bond is a type of insurance that protects the public if the dealer breaks licensing laws.

How Can an Insurance Agent Obtain an Arkansas Auto Dealer Bond?

BondExchange makes obtaining an Arkansas Auto Dealer Bond easy. Simply login to your account and use our keyword search to find the “auto dealer” bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email, or chat from 7:30 AM to 7:00 PM EST to assist you.

At BondExchange, our 40 years of experience, leading technology, and access to markets ensure that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.

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How Much Does Arkansas Used Auto Dealer Bond Cost?

The $25,000 Arkansas Motor Vehicle Dealer surety bond can cost anywhere between $100 to $2,250 per year or $10 to $225 per month. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. We also offer easy interest-free financing for premiums over $500. The chart below offers a quick reference for the approximate bond cost on the $25,000 bond requirement.

$25,000 Arkansas Auto Dealer Bond Cost

Credit Score* Bond Cost (1 year) Bond Cost (1 month)
749+ $100 $10
699 – 748 $125 $13
660 – 698 $175 $18
649 – 659 $250 $25
629 – 648 $300 $30
619 – 628 $500 $50
600 – 618 $750 $75
580 – 599 $1,000 $100
570 – 579 $1,750 $175
550 – 569 $2,000 $200
500 – 549 $2,250 $225

*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.

How Does Arkansas Define “Motor Vehicle Dealer”?

Arkansas Code 27-14-203 defines a motor vehicle dealer as “any person or business who sells or offers for sale a motor vehicle after selling or offering for sale five (5) or more motor vehicles in the previous twelve (12) months”.

Arkansas Auto Dealer Bond

BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.

How Do Dealers Apply for a Used Motor Vehicle Dealer License in Arkansas?

The process for applying for a used motor vehicle dealer license in Arkansas is pretty complex. Below are the general guidelines, but dealers should refer to the Application Form for details on the process.

License Period – The Arkansas used dealer license is valid for one year from the date of issuance and must be renewed before the expiration date.

Step 1 – Establish a Location

Dealers are required to establish a permanent place of business that meets the following minimum requirements:

    • Used primarily for the sale of motor vehicles
    • A telephone number listed in the name of the business
    • Filing cabinet to store all required records and documents
    • Permanently affixed sign indicating the business as a used motor vehicle dealership and is visible from the street

Step 2 – Purchase Insurance

Dealers must purchase and maintain comprehensive liability insurance on all vehicles to be offered for sale with a minimum limit of $75,000.

Step 3 – Purchase a Surety Bond

Dealers must purchase and maintain a $25,000 auto dealer surety bond.

Step 4 – Complete Dealer Education

All used dealer applicants must either attend or have an employee attend, a mandatory dealer training course conducted by a state-approved instructor.

Step 5 – Complete the Application

All new dealer regulatory license and renewal applications should be mailed to the following address:

Arkansas State Police
Attn: Used Motor Vehicles
#1 State Police Plaza Drive,
Little Rock, AR 72209

    • 5.a Pictures – Dealers must submit photos of their business location, including their sign, with their application

Step 6 – Pay Fees

The following fees are associated with obtaining the used dealer license:

    • $125 application fee
    • $125 application fee for each satellite location

Step 7 – Pass Inspection

After the dealer has submitted their application and paid all required fees they will be contacted by a representative from the Arkansas State Police who will conduct an inspection of their business location

Step 8 – Obtain Dealer Plates

Dealers can obtain dealer plates from their local revenue office after their license is issued.

How Do Arkansas Auto Dealers Renew Their License?

Dealers should send their renewal application and all required documents and fees to the following address:

Arkansas State Police
Attn: Used Motor Vehicles
#1 State Police Plaza Drive,
Little Rock, AR 72209

The Arkansas used dealer license is valid for one year from the date of issuance and must be renewed before the expiration date. Dealers are assessed a $35 late fee if they file the application 31 or more days late. Dealers who fail to renew their license 6 months after the expiration date will have to apply for a new license.

What Are the Insurance Requirements for the Arkansas Auto Dealer License?

The State of Arkansas requires dealers to obtain liability insurance on all vehicles for sale based on the state minimums (currently 25/50/25); however, they must have an aggregate of at least $75,000. Dealers must also file a $25,000 motor vehicle dealer surety bond.

How Do Arkansas Auto Dealers File Their Bond?

Dealers should mail the completed bond form, including the power of attorney, to the following address:

Arkansas State Police
Attn: Used Motor Vehicles
#1 State Police Plaza Drive,
Little Rock, AR 72209

The Auto Dealer surety bond requires signatures from both the surety company that issues the bond and the auto dealer. The surety company should include the following items on the form:

  • Legal name and location of the entity/individual(s) buying the bond
  • Surety company’s name and signature
  • Date the bond is signed

How Can Arkansas Auto Dealers Avoid Bond Claims?

To avoid claims on the Motor Vehicle Dealer Bond, dealers must follow all dealer regulations in the state, including some of the most important issues below that, tend to cause claims:

  • Do not engage, or allow representatives of the business to engage, in any acts of fraud
  • Pay sellers of vehicles promptly and in full
  • Pay taxes on time and in full. Dealers should consider setting aside tax obligations as they accrue.
  • Do not engage in any illegal selling practices

What Other Insurance Products Can Agents Offer Dealers in Arkansas?

Arkansas requires used motor vehicle dealers to obtain liability insurance. Most reputable dealers that provide towing or service station services should also obtain garage keeper’s liability. Bonds are our only business at BondExchange, so we do not issue any form of liability insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.

How Can Insurance Agents Prospect for Arkansas Auto Dealer Customers?

Arkansas unfortunately does not display used motor vehicle dealer information to the public. We suggest contacting a list service company or the Arkansas Secretary of State for a list of active motor vehicle dealers. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.

What Other States Require Auto Dealer Bonds?

All 50 states and the District of Columbia require auto dealers to obtain an Auto Dealer Bond as a prerequisite for licensure. Insurance agents should utilize our Main MVD Page for a detailed analysis of the Auto Dealer Bond requirements nationwide.

Arkansas Auto Dealer Bond