Motor Vehicle Dealer Bond in Arkansas

What this bond requires in Arkansas

Arkansas splits dealer regulation between two agencies: Arkansas State Police licenses used motor vehicle dealers (UMVD) under the Used Motor Vehicle Buyers Protection Act with a $25,000 bond required by A.C.A. § 23-112-607, while the Arkansas Motor Vehicle Commission licenses new (franchise) dealers with a $50,000 bond under A.C.A. § 23-112-302. The bond runs to the State of Arkansas or any aggrieved party as indemnity for losses caused by dealer violations. Surety liability is capped at the penal sum of the bond regardless of the number of claims.

Who requires it

The motor vehicle dealer bond is required by the Arkansas State Police, Used Motor Vehicle Dealer Section (used dealers) and Arkansas Motor Vehicle Commission, Department of Labor and Licensing (new/franchise dealers) under Ark. Code Ann. § 23-112-607 (used dealers); Ark. Code Ann. § 23-112-302 (new motor vehicle dealers).

How to file in Arkansas

Used dealers apply through the Arkansas State Police Electronic Licensing Portal (ELP), submitting the application, the $25,000 corporate surety bond on the ASP-approved form, proof of insurance, and required supporting documents. New (franchise) dealers apply to the Arkansas Motor Vehicle Commission with the initial application package, $50,000 franchise dealer bond, and required franchise documentation.

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FAQ

Common questions

Is a motor vehicle dealer bond required in Arkansas?

Yes. Arkansas requires motor vehicle dealer bonds issued by an admitted surety. The required amount is $25,000 to $50,000.

How much is the bond in Arkansas?

The bond amount is $25,000 to $50,000. Your annual premium is a small percentage of that, based on credit and experience.

Who requires the bond?

The bond is required by the Arkansas State Police, Used Motor Vehicle Dealer Section (used dealers) and Arkansas Motor Vehicle Commission, Department of Labor and Licensing (new/franchise dealers).

How is the bond filed?

Used dealers apply through the Arkansas State Police Electronic Licensing Portal (ELP), submitting the application, the $25,000 corporate surety bond on the ASP-approved form, proof of insurance, and required supporting documents. New (franchise) dealers apply to the Arkansas Motor Vehicle Commission with the initial application package, $50,000 franchise dealer bond, and required franchise documentation.

What does the bond cover?

Surety bonds protect the obligee, not the principal. If you fail to meet the obligation the bond guarantees, the surety pays the claim and recovers from you.

Is a surety bond the same as insurance?

No. Insurance protects you. A surety bond protects whoever required the bond. You repay the surety for any claim they pay.