How much does an auto dealer bond cost in Arkansas?
Auto dealer surety bonds (also called motor vehicle dealer bonds) are mandated by the Arkansas Motor Vehicle Commission as part of the licensing requirements for dealerships to conduct business in the state. The Motor Vehicle Commission sets the total bond amount based on the type of dealership:
- $25,000 bonds for used motor vehicle dealers, wholesalers, and auto auction dealers
- $50,000 bonds for new vehicle dealers
The surety company determines your premium rate, which is the percentage of the total bond amount you pay as the premium. Premium rates for Arkansas auto dealer bonds typically cost between 1% and 3% of the total bond amount.
During the application process, the surety company evaluates your personal credit, financial statements, industry experience, and licensing history. Applicants with good credit generally receive the lowest rates, however, bad credit will not prevent you from securing an Arkansas auto dealer bond. EZSurety still offers competitive rates to individuals with low credit scores or other financial issues.
Below are the lowest premiums EZ Surety has issued for auto dealer surety bonds in the State of Arkansas.
- EZ Surety has issued used car dealer bonds for premiums as low as $245.
- EZ Surety has issued new motor vehicle bonds for premiums as low as $500.
Why are auto dealer bonds important in Arkansas?
Arkansas auto dealer bonds provide protection for customers, creditors, and the state government. When an Arkansas motor vehicle dealer posts a surety bond, they provide a guarantee to the bond’s Obligee (the Arkansas Motor Vehicle Commission) that they will conduct business in compliance with the conditions listed in Arkansas Code Annotated §23-112-601, Used Motor Vehicle Buyers Protection.
If the auto dealer fails to comply with the code, the surety company will pay out financial losses to damaged parties up to the full bond amount. The auto dealer is liable to reimburse the surety for any damages paid under the bond.
How to get your auto dealer license in Arkansas
To obtain your motor vehicle dealer license in Arkansas, you must meet the Arkansas Motor Vehicle Commission licensing requirements by completing the following steps:
- Submit a license application to the Arkansas Department of State Police
- Provide a photograph of the place of business
- Post the appropriate surety bond
- Provide proof of liability insurance
- Submit an affidavit from the Arkansas State Police
Arkansas motor vehicle dealer licenses are valid for one year from the date they are issued. Used auto dealers must submit an application with the $250 license fee to renew their license each year.