Arkansas requires auto dealers to get a license and a surety bond before they conduct business in the state. Learn more about the process below, and apply online for the bond you need today.
Who Needs An Arkansas Dealer License?
Arkansas defines used auto dealers as those who buy and sell (or offer to sell or advertise for sale) five or more vehicles registered to them in a calendar year, or attempt to. They are licensed through the Arkansas State Police. Dealers license their primary business location and must submit separate applications for any additional locations.
Some of the information required of Arkansas used auto dealer license applicants includes:
- Business phone number in the dealership’s name appearing in local directories
- $250 fee for primary location
- $125 fee for secondary location(s)
- Business name(s), address, and email
- Business owner’s name, address, and social security number
- Business type (individual, partnership, etc.)
- Names and contact information of anyone with ownership interest
- Proof of a minimum of $75,000 of liability insurance coverage
- $25,000 surety bond
- Names and addresses of all dealership salespersons
- Photos of business’s sign (must be visible from the nearest road)
These licenses need to be renewed annually, and the state assesses late penalties if licenses aren’t renewed on time. Dealers whose licenses have been expired for more than 31 days but less than six months need to include a $35 late fee with their renewal. A license not renewed within six months of expiring is considered permanently expired, and licensees will need to restart the process. Renewal fees correspond with initial licensure fees.
Once completed, Arkansas auto dealers mail in their application and applicable fees:
Arkansas State Police Attn: Used Motor Vehicles #1 State Police Plaza Drive Little Rock, AR 72209
You can also deliver your application in person to State Police headquarters. Used auto dealers can also get a temporary business location permit that’s valid for ten days, which allows them to sell vehicles from a different location.
Surety Bond Requirements
The state of Arkansas requires a $25,000 surety bond of used auto dealers. However, dealers with multiple dealership locations can get a $100,000 surety bond to cover each location.
The Arkansas used auto dealer surety bond protects consumers in the state from unethical, illegal business practices on the part of the dealer. Should a dealer violatestate law and cause financial damage to a consumer, they can file a claim against the surety bond to seek reimbursement. If their claim is proven, the surety pays the claim up to the bond’s full amount. The bondholder (the used auto dealer) must then reimburse the surety—if a $5,000 claim was paid, the dealer must remit the full amount.
Violations of state law include misrepresenting a vehicle’s condition, falsifying or altering vehicle titles, and operating a dealership without a license. First violations are considered a Class A misdemeanor and second, third, and subsequent violations a Class D felony.�Three or more violations result in a three-year license suspension for each violation.
Photo by�Alex Holyoake�on�Unsplash