Arkansas Auto Dealer Bond
What is an Arkansas auto dealer bond?
Used motor vehicle dealers in Arkansas must post and maintain a $25,000 surety bond to operate a business. Franchise dealers need a $50,000 bond. The requirements are part of the state licensing process.
An auto dealer bond holds dealers and dealerships accountable to the law and industry regulations. If a dealer causes a customer financial harm by breaking the law, the customer can file a claim against the bond for compensation.
Get Your Auto Dealer Bond in Arkansas:
How much does an Arkansas auto dealer bond cost?
Auto dealer bond premiums can vary based on applicants’ credit scores: the higher your credit score, the lower your annual premium. If you have excellent credit, expect to pay as little as 1% or less of the total bond amount. Other factors that may impact the cost of your bond include your industry experience and business and personal financials.
ZipBonds can offer $25,000 Arkansas auto dealer bonds for as low as $125 per year. $50,000 auto dealer bonds for franchise dealers typically start at $250 annually. You can apply today on our website.
- $25,000 motor vehicle dealer bond for used auto dealers – not DBA
- $25,000 motor vehicle dealer bond for used auto dealers – DBA
- $50,000 motor vehicle dealer bond for franchise dealers
Who needs an auto dealer surety bond and license in Arkansas?
According to the Arkansas Code, a dealer includes anyone who sells or offers to sell motor vehicles after offering at least five vehicles for sale in the last 12 months. You’re also considered an auto dealer if you’re a new or used motor vehicle dealer already licensed in Arkansas.
Used motor vehicle dealers must post a $25,000 bond, and new (franchise) motor vehicle dealers must post a $50,000 bond.
How to Apply for Your License in Arkansas
New Auto Dealers
Here’s an overview of how to complete your new motor vehicle dealer application with the Arkansas Motor Vehicle Commission. See the Dealer Procedure Policy for details.
- Complete the application, filling out all required documents.
- Submit any required fees.
- Obtain a $50,000 new motor vehicle dealer surety bond.
- Submit a copy of your dealer sales and service agreement or manufacturer/distributor franchise agreement.
Used Auto Dealers
To apply with the Arkansas State Police and become a used auto dealer, you must fulfill the following requirements. See the Packet for details.
- Business location
- Picture of business location
- Sign and dealership name
- Picture of sign
- Business phone number
- Lockable file cabinet
- $25,000 used motor vehicle surety bond
- Garage liability insurance
- Completed used motor vehicle dealer application
- $250 fee
- Inspection
Frequently Asked Questions
How long does it take to get a motor vehicle dealer bond?
Since this bond requires underwriting, we can’t issue it to you instantly. However, the ZipBonds team always strives to deliver your bond to you within 24 hours of application.
Who regulates auto dealer bonds in Arkansas?
The Arkansas Motor Vehicle Commission regulates surety bonds and licensing for franchise dealers. The Arkansas State Police regulates the used vehicle industry.
How do I renew my surety bond?
You must renew your bond each year by a specific date for it to remain active (and for you to maintain your business license).
If you’re buying your bond from Zip, we’ll send a reminder when the expiration date is approaching. That way, you’ll have plenty of time to renew your bond and maintain your business license.
What happens if someone files a claim on my bond?
A customer can file a claim if a dealer commits fraud or unethical or unlawful business activity. If the claim is valid, the surety may cover the customer’s losses up to the total amount of the bond. The dealer will then need to pay back the surety for the damages.
Claims can be costly and damage your reputation and ability to get licensed and bonded again, so it’s best to do everything you can to avoid them.
How can I avoid claims on my auto dealer bond?
Avoid illegal activities and fraudulent business practices to prevent claims on your bond. Pay all taxes you owe. Also, ensure you comply with your licensing regulations. If a customer complains about something, address the issue immediately to avoid complaints from turning into costly claims.
How to Get Your Arkansas Auto Dealer Bond
ZipBonds offers the fastest and most secure option for getting the surety bonds you need. Our all-digital platform is intuitive and straightforward. Apply online or call us at (888) 435-4191 to get bonded in a flash!
About ZipBonds.com
Founders Ryan Swalve and Zach Mefferd formed the vision for ZipBonds.com when they realized how overly complicated it was to help clients place surety. The frustration of being unable to incorporate the technology they’d used in other insurance-focused projects left them thinking “there has to be a better way.”
Fast forward a couple of years, and that better way is the impetus of everything we do at ZipBonds. We constantly look for innovative ways to improve the bonding process for our clients and agents. Our team comprises individuals who understand all angles of surety – for companies, agencies, and individuals. Incorporating everyone’s point of view to improve the process while simultaneously integrating cutting-edge technology is what sets our business apart.