Arkansas Auto Dealer License in 6 Easy Steps

Arkansas law requires anyone who sells, leases, or offers motor vehicles for sale as a business to obtain a dealer license before operating.

Under Arkansas Code §23-112-601 and related statutes, dealer licensing is regulated by different agencies depending on the type of vehicles you sell:

• Arkansas State Police (Used Motor Vehicle Dealer Section) → used vehicle and wholesale dealers
• Arkansas Motor Vehicle Commission (AMVC) → new motor vehicle, motorcycle, ATV dealers, and lessors

Since most applicants are used vehicle dealers, this guide focuses primarily on that process while noting differences where relevant.

Here’s a step-by-step overview of how to get your Arkansas auto dealer license.

1. Determine Your License Type

Arkansas recognizes several types of motor vehicle licenses, but most applicants fall into a few main categories:

• Used motor vehicle dealer
• Wholesale dealer
• New motor vehicle dealer
• Motorcycle or ATV dealer
• Motor vehicle lessor

Additional license types, such as manufacturers, distributors, and their representatives, are regulated by the Arkansas Motor Vehicle Commission but apply to companies involved in vehicle production or distribution rather than retail sales.

2. Register Your Business and Meet Tax Requirements

To operate legally in Arkansas, you must:

• Register your business entity with the Arkansas Secretary of State (if forming an LLC, corporation, or other formal entity)
• Obtain an Employer Identification Number (EIN) from the IRS if your business has employees or is structured as a corporation or partnership
• Register for a sales tax permit with the Arkansas Department of Finance and Administration (DFA), which allows you to collect and remit sales tax on vehicle transactions

These registrations are required to verify your business identity and are necessary before submitting your dealer license application.

3. Set Up a Compliant Business Location

You must operate from a permanent dealership location that meets Arkansas State Police requirements and can pass a required site inspection. Your location must:

• Be a physical commercial address (not a residence or P.O. box)
• Have a permanent business sign clearly visible from the roadway
• Include office space for conducting transactions and storing records
• Have a working business telephone line that is publicly accessible

Before setting up your dealership, confirm the property complies with local zoning requirements. You must also:

• Maintain dealership records for at least three years and make them available for inspection
• Provide photos of your business location and signage when submitting your application

4. Obtain Insurance and an Auto Dealer Bond

Before submitting your dealer license application, you must obtain both liability insurance and a surety bond as required under Arkansas law.

Liability Insurance

You must carry garage liability insurance that meets Arkansas minimum coverage requirements:

• $25,000 bodily injury per person
• $50,000 bodily injury per accident
• $25,000 property damage

This coverage must apply to all vehicles offered for sale.

Surety Bond

Arkansas requires a dealer surety bond to protect customers and ensure compliance with state regulations. Required bond amounts include:

• $25,000 for used vehicle dealers
• $100,000 for used dealers with 4+ locations
• $50,000 for new motor vehicle dealers
• $25,000 for motorcycle, ATV dealers, and lessors

The bond must be submitted as part of your license application. Applicants do not pay the full bond amount. Instead, the cost is typically:

• 1%–3% of the bond amount with strong credit
• Up to 10% with lower credit

5. Submit Your Application and Supporting Documents

You must submit a completed dealer license application along with all required documents to the appropriate licensing authority.

Your application must include:

• Proof of liability insurance
• A valid surety bond
• Photos of your business location and signage
• Business phone listing
• A list of all owners, employees, and designated legal contact for the business

Incomplete applications may be returned or delayed, so it is important to ensure all required information is provided.

• Used vehicle dealer applications must be submitted to the Arkansas State Police
• New, motorcycle, ATV dealer, and lessor applications must be submitted to the Arkansas Motor Vehicle Commission

Applications are typically processed in up to 15 business days, depending on completeness and review volume.

6. Pass Inspection and Begin Operations

After your application is reviewed, the Arkansas State Police will contact you to schedule a dealership inspection.

You must pass this inspection before your license can be finalized and issued. The inspection verifies that your business meets all state requirements, including:

• Your business location
• Proper signage
• A working business phone line
• Recordkeeping setup and storage

You should ensure your dealership is fully set up and compliant before the inspection, as failure to meet requirements may delay your approval.

Once you pass inspection and your license is issued, you can:

• Obtain dealer plates from your local DMV
• Begin operating as a licensed motor vehicle dealer in Arkansas

Arkansas Dealer License Fees

The total cost of getting an Arkansas dealer license depends on your license type, number of locations, and required documentation.

Estimated total cost:

• $250–$500+ in licensing fees
• $125–$2,500+ for the bond (depending on credit and structure)
• Additional insurance costs based on business risk

Renew Your Arkansas Auto Dealer License

Used Vehicle Dealers

For used vehicle dealers, licenses must be renewed annually before the expiration date.

A late fee of $35 applies if the license is not renewed within 30 days after expiration. If more than six months pass after the license expires, it cannot be reinstated, and the dealer must apply for a new license.

Arkansas law also requires dealers to demonstrate at least five used vehicle sales during the prior calendar year in order to qualify for renewal.

To renew your license, you must maintain and provide:

• A valid surety bond
• Proof of liability insurance
• The required renewal fee

Dealerships may also be subject to inspection to verify continued compliance with state requirements.

New Vehicle, All-Terrain, and Motorcycle Dealers

Your Arkansas auto dealer license will expire on December 31 after it is issued, and you must renew it before that date. To renew, submit the renewal application, the $100 fee, and updated dealership information.

Vehicle Lessors

Vehicle lessor licenses also expire on December 31 and must be renewed through the appropriate renewal application.

FAQs

Do you need a dealer license to sell cars part-time in Arkansas?

Yes. Arkansas requires a dealer license if you are engaged in the business of selling vehicles, even on a part-time basis. If you buy and sell vehicles for profit or operate in a way that resembles a dealership, you must be licensed regardless of whether it is your primary occupation.

Can you run an Arkansas dealership from home?

No. Arkansas requires dealers to operate from a commercial business location that meets state requirements. Residential addresses, home garages, and P.O. boxes do not qualify as approved dealership locations.

How long does it take to get an Arkansas dealer license?

The process typically takes 2 to 4 weeks, depending on how quickly you complete your application, obtain your bond and insurance, and pass inspection. The Arkansas State Police generally reviews applications within about 15 business days.

Do you need prior experience to become a car dealer in Arkansas?

No, Arkansas does not require prior experience, education, or training to obtain a dealer license. However, you must meet all business, location, insurance, and bonding requirements before applying.

Can you transfer an Arkansas dealer license to another person or location?

No. Dealer licenses in Arkansas are not transferable. If ownership changes or you move to a new location, you must submit a new application and meet all licensing requirements again.