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Arkansas Auto Dealer Bond

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What is an Arkansas Auto Dealer Bond?

In many states, licensed auto dealers must post a surety bond as part of their ongoing licensing requirements. An Arkansas auto dealer bond meets this requirement for dealers operating an in-person or online dealership in the state. Arkansas, like other jurisdictions, makes an auto dealer bond mandatory because the bond helps protect customers against illegal or fraudulent business practices.

When an Arkansas auto dealer bond is in place, it creates a contract between three parties. The surety company provides the bond as a form of extended credit to the principal who is required to purchase the bond. The obligee, which is the Arkansas State Police, requires a bond to be posted. When a customer makes a claim against a bond for financial losses after working with the dealership, the surety company pays the claim. However, the auto dealer is then responsible for repaying the claim.

Who is Required to Get an Arkansas Auto Dealer Bond?

Similar to many other states requiring auto dealer licensing, any person or business selling five or more motor vehicles within the calendar year is required to meet certain licensing mandates. Part of the licensing obligations for auto dealers in Arkansas is securing an auto dealer bond that helps protect the buying public. Used auto dealers, wholesale auto dealers, auction auto dealers, and franchised auto dealers must post an Arkansas auto dealer bond to comply with licensing requirements.

Arkansas Auto Dealer Bond Obligee Details

Arkansas laws grant licensing authority to the Arkansas State Police Department, making the organization the obligee of Arkansas auto dealer bonds. Any licensed auto dealer operating within the state must abide by the rules set forth by the obligee, and submit licensing forms and documentation along with surety bond information to the department. Auto dealers in Arkansas may contact the obligee at the address below:

Arkansas State Policy

One State Policy Plaza Drive

Little Rock, Arkansas 72209

Phone: 501-618-8000

What Does an Arkansas Auto Dealer Bond Cost?

The cost of an Arkansas auto dealer bond depends on the amount of the bond requirement as well as other financial factors. Used auto dealers in the state must post a bond of $25,000, while new vehicle dealers require a $50,000 bond. In either case, though, auto dealers only pay a percentage of the total, typically between 1 and 10% of the bond requirement.

In addition to the bond amount necessary to meet licensing requirements, the price of an Arkansas auto dealer bond is based on the personal credit history of the applicant. Dealers with a high credit score are a lower risk to the surety company providing the bond, while those with bad credit may be a higher risk. Arkansas auto dealer bond prices are a higher percentage for dealers with a low credit score.

How Do I Get an Arkansas Auto Dealer Bond?

You submit a brief application online to get an Arkansas auto dealer bond. After reviewing your credit history and business information, the surety company will provide a quote for your bond and instructions on completing the process.

Renewing an Arkansas Auto Dealer Bond

An auto dealer license issued in Arkansas expires one year from the date it was issued. Auto dealers must renew their license every 12 months, and the auto dealer bond must also be renewed at the same time. The surety company providing the Arkansas auto dealer bond sends renewal information several weeks in advance to ensure licensed auto dealers remain compliant with state laws and regulations.

Frequent Questions

What does an auto dealer bond cost?

Costs are a percentage of the auto dealer bond amount that's required of you, which is based on your personal credit. Use our bond pricing tool to get a quick ballpark estimate.

Can I get a bond with bad credit?

Yes. You can get you approved for a bond regardless of your credit situation. However, the price will increase. You can apply to get an instant approval. As the largest writer of surety bonds in the U.S., we have access to high risk markets that many other agencies do not.

How long does the application take?

It only takes minutes, as we can approve you for your bond instantly online. You can get a no obligation quote on our website at any time.

Can I get auto dealer bond insurance to protect myself?

No. An auto dealer bond does not protect you, it protects the public. However, you can protect yourself or your customers by getting fidelity bonds.

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Our company has been with JW Surety for several years now so when we needed to obtain a bond for a new company, we immediately went to them for help. Our rep, Melissa, was extremely helpful and prompt which made the process extremely easy for me.
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Trying to get a local Surety Bond was like driving a car on three tires. I searched Surety Bonds and found JW Surety Bonds. I got online and filled out the information and with in 30 minutes received a response from Melissa. She was informative, friendly and helpful. One more super satisfied customer.

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About JW Surety Bonds
We are a family owned and operated agency established in 2003. We started with just two people, and grew to become the largest volume bond producer in the nation with 50+ employees. Since day one, our team focus has been on providing real-time online quotes, an easy process, and the best in claims defense. Learn more about our company.