Overview of Arkansas Auto Dealer Bond Requirements
This bond is a type of auto dealer bond which is required of applicants for a franchise or used car dealer license in Arkansas. Franchise dealers are required to obtain a $50,000 auto dealer bond and submit it to the Arkansas Motor Vehicle Commission (AMVC) for licensing. Used auto dealers are required to submit a $25,000 surety bond to the Arkansas Department of State Police.
The purpose of the bond is to guarantee that a dealer will comply with the rules and regulations for auto dealers in Arkansas, and conduct business honestly and fairly. If a dealer violates the conditions of the bond and/or state regulations, a claim can be filed against their bond to secure compensation for any damages or losses suffered as a result. Compensations against claims can be as high as the full amount of the bond, also known as its penal sum.
Bond: New Motor Vehicle Dealer Bond, New Motor Vehicle Dealer Branch for Used Cars
Obligee: Motor Vehicle Commission
Obligee Address: 101 East Capitol, Suite 212, Little Rock, Arkansas 72201
Required Expiration Date of Dealer Bond: N/A
Surety Bond: Bond is Continuous and does not require a Continuation Certificate
Bond Form Revision Date: 1/2006
Bond: Used Motor Vehicle Dealer Bond
Obligee: State Police – Special Services Section
Obligee Address: #1 State Police Plaza, Little Rock, Arkansas 72209
Required Expiration Date of Dealer Bond: N/A
Surety Bond: The Used Auto Dealer Bond is Continuous, it does not require a Continuation Certificate
Bond Form Revision Date: N/A
Find out more about how surety bonds work through our detailed ‘What is a surety bond’ guide!
Read on for more information about the cost of your Arkansas used car dealer bond, why claims against auto dealer bonds occur, and how you can get your bond.
Don’t hesitate to call us at 866.450.3412 if you have any additional questions about the bonding requirements for auto dealers in Arkansas!
The Cost of Your Bond
To get your surety bond from a surety you need to pay a bond rate. The bond rate is a fraction of the full amount of your bond. The Arkansas used car dealer bond’s amount is $25,000. The cost of getting bonded will be a percentage thereof.
The exact cost of your bond is determined by the surety when you apply. Sureties review your credit score, your financial statements, and other indicators of financial stability and reliability. They also take into account your previous work experience, though credit score remains the number one factor.
Applicants who have a high credit score, one of 700 FICO or above, typically get the lowest rates on their bond. For auto dealer bonds this means 1%-2% of the total bond amount or as little as $250 to get your bond.
For an exact and entirely free quote on your bond simply submit the surety bond application form and we will get back to you with your quote.
Getting Bonded With Bad Credit
If your credit score is very low but you still want to get bonded - don’t worry! Applicants with a low score simply apply through our Bad Credit Program which allows them to get bonded, even if at a slightly higher rate.
Higher rates are due to the increased risk assumed by sureties when bonding such applicants but other than that bonds under this program are issued by the same companies, and are the same in all respects as are bonds for high credit applicants.
Have a look at the program page for more information regarding getting bonded with a low credit score!
Claims Against Your Bond
A bond claim may arise when a bonded party, in this case an Arkansas auto dealer, violates the conditions of the bond which are based on the legal requirements for auto dealers in the state, set out in the Arkansas Motor Vehicle Commissions Act (AR Code § 23-112-308 (2016)), among others.
Such violations include deliberate dishonesty towards customers, fraud, selling vehicles without a license or assisting unlicensed persons in the sale of cars, selling vehicles from a different location than the one listed in the license, and other violations that may cause harm and losses to consumers.
In the event of such a violation on behalf of the dealer, consumers may file a complaint with the Arkansas Department of State Police which in turn can file a claim against the bond with the surety bond company.
If a claim is filed, your surety company will investigate the issue and possibly extend compensation to claimants if it establishes you have violated the bond agreement. In such an instances, you will be required to repay the surety for any compensation it has extended.
The best way to avoid bond claims is to steer clear from any situations which may result in a possible violation. If you are unsure if anything you have done may constitute a cause for a claim, contact your surety to receive advice and take action to remedy the situation, if needed!
Get Your Arkansas Auto Dealer Bond Here!
To apply for your bond, simply complete and submit our bond application form. We will then contact you with a free quote on your bond and further instructions how to complete your application, if you decide to get bonded at this time.
Bonds are typically issued within two working days, once an application is processed. When your bond is issued, we will provide you with a digital copy thereof, as well as send the original via regular mail.
Don’t hesitate to call us at 866.450.3412 if you need more information about getting bonded!