What is an Arkansas auto dealer bond?
If you are new to the dealership industry, it’s normal to be confused by this requirement. Auto dealer bonds are designed to protect the public, and are required from licensed dealers in almost all states. These bonds are a type of surety bond agreement between the dealer, the state, and the bonding company that issues the auto dealer bond.
Failure to comply with the terms of the bond agreement can get dealers into trouble, because they can face a claim up to the maximum amount of the bond.
Let’s take a quick look at the auto dealer bond requirement in Arkansas:
Bond Name: Arkansas Motor Vehicle Dealer Bond
Bond Amount: $25,000 (for used-car dealers)
$50,000 (for new-car dealers)
For used-car dealers: State Police – Special Services Section
#1 State Police Plaza Dr.
Little Rock, Arkansas 72209
For new-car dealers: Arkansas Motor Vehicle Commission
101 East Capitol, Suite 212
Little Rock, Arkansas 72201-3826
Expiration date of the bonds: 1 years since the date issued (used car dealers)
Dec. 31 of each year (new car dealers)
You can begin your online application or consult the questions below if you want to learn more about the bonding requirement. For any other questions you may have, call us at (877)-514-5146 and we’ll be happy to help!
Questions about Surety Bonds in Arkansas
How much does an Arkansas auto dealer bond?
If you wish to get a rough estimate of your bonding costs, there’s an easy way. Depending on whether you are a used-car or a new-car dealer, your total bond amount will be either $25,000 or $50,000.
What you pay is just a small percentage of that sum, called a premium. The premium is determined by the bonding company. Applicants with a good credit score typically pay only between 1% and 3%.
|Surety Bond Cost by Credit Score|
|Surety Bond Name||Surety Bond Amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Arkansas New Car Dealer Bond||$50,000||$375-$750||$500-$1,500||$1,250-$2,500||$2,500-$5,000|
|Arkansas Used Car Dealer Bond||$25,000||$188-$375||$250-$750||$625-$1,250||$1,250-$2,500|
You can find all the information you need, and some cost-saving tips, on our What Does a Surety Bond Cost? Page.
Are bad credit dealer bonds available for Arkansas?
Lance Surety Bonds offers an exclusive bad credit surety bonds program designed to help all our clients get the bond they need and remain in compliance, regardless of credit issues.
99% of dealers will be able to obtain their Arkansas dealer bond with two exceptions: applicants with open bankruptcies and/or late child support payments.
As for bonding costs, bad credit applicants should expect premiums of between 4% and 10%.
How do I get my Arkansas auto dealer bond?
Applying for your dealer bond is not a complicated process with our online application. After filling it out you will receive a free bond quote almost instantly, and one of our surety experts will contact you through phone or email (whichever you prefer) to let us know how you can finalize the application.
Processing times can be as little as a day or two within paying your bond quote.
How do I renew my Arkansas auto dealer bond?
Renewing your bond is even simpler than getting bonded the first time. Once again, you receive a bond quote, and after payment, your bond will be renewed by the surety.
It’s important not to forget to renew your auto dealer bond, otherwise your license can be revoked. Both new and used-car dealer bonds need to be renewed annually. Lance Surety Bond sends out renewal reminders to all of its clients ahead of renewal deadlines, so you can rest assured about compliance.
How can a I get an Arkansas dealer license?
Submitting a valid dealer bond is an important step to getting a license, but there are many others that you need to complete. You have to get liability insurance, submit a criminal background check, show a copy of your dealer agreement (new-car dealers), submit photos of your location, and a few others.
Be sure to check all licensing requirements pertaining to the license type you wish to obtain.
What happens if there is a claim against my dealership?
As we mentioned, auto dealer bond are there to ensure the interests of car buyers are protected. Therefore, if you use unethical business practices (knowingly or not), you can face a claim.
It’s best to avoid claims at all costs, so if there is the potential for one, try and settle it out of court. If it’s not possible, document all interactions with the claimant as best as you can, so you can build a solid case in court.
If the claim is proven in court, you have to reimburse the claimant. The surety covers the claim initially, while you are required to repay.