Arkansas has two motor vehicle dealer bonds, and which one you file depends on the license you hold. Used motor vehicle dealers file a $25,000 corporate surety bond with the Arkansas State Police under Arkansas Code 23-112-607. New (franchise) motor vehicle dealers file a $50,000 corporate surety bond with the Arkansas Motor Vehicle Commission (AMVC) under Arkansas Code 23-112-302; new motorcycle, all-terrain vehicle, and motor vehicle lessor licenses use a $25,000 bond instead. The bond is a consumer-protection guarantee: it pays a buyer (or the state) if the dealer breaks the licensing law, up to the bond amount. It is not insurance for the dealer, and it is separate from the dealer license itself.
| Item | Used motor vehicle dealer | New / franchise motor vehicle dealer |
|---|---|---|
| Who requires it | Arkansas State Police (Department of Public Safety), Used Motor Vehicle Dealer Section | Arkansas Motor Vehicle Commission (Arkansas Department of Labor and Licensing) |
| Governing law | Ark. Code 23-112-607 (Subchapter 6, Used Motor Vehicle Buyers Protection) | Ark. Code 23-112-302 (Subchapter 3, License and Rule) |
| Official form | State-approved used motor vehicle dealer surety bond form (Arkansas State Police) [VERIFY against Arkansas State Police: exact form name/number and revision date] | Surety bond form approved by the Arkansas Motor Vehicle Commission [VERIFY against AMVC: exact form name/number and revision date] |
| Bond amount | $25,000 (single location); $100,000 blanket for multiple locations | $50,000 (motor vehicle dealer); $25,000 (motorcycle, ATV, or lessor); $25,000 per branch license |
| Premium basis | [CLIENT FLAG: insert All n One premium rate/basis] | [CLIENT FLAG: insert All n One premium rate/basis] |
| Coverage term | License period runs the calendar year (Jan 1 to Dec 31) and renews in January; bond stays on file with the license [VERIFY against Arkansas State Police bond form: whether the bond is written continuous or for a fixed one-year term] | Bond takes effect when the license is issued and stays in force while licensed; license expires December 31 following issue |
| Obligee | State of Arkansas / any aggrieved party (Arkansas State Police holds the bond) | State of Arkansas, for the benefit of any aggrieved party (Arkansas Motor Vehicle Commission) |
How much is the bond, and which amount applies to me?
The amount is set by statute and depends on your license type and how many locations you run. Find your row:
| License type | Bond amount | Authority |
|---|---|---|
| Used motor vehicle dealer, single location | $25,000 | Ark. Code 23-112-607(d)(1)(A) |
| Used motor vehicle dealer, multiple locations | $100,000 blanket bond covering all licensed locations, in lieu of a separate $25,000 bond for each | Ark. Code 23-112-607(d)(1)(B) |
| New (franchise) motor vehicle dealer | $50,000 | Ark. Code 23-112-302(c)(1)(A)(i) |
| New motorcycle dealer, new all-terrain vehicle (ATV) dealer, or motor vehicle lessor | $25,000 | Ark. Code 23-112-302(c)(1)(A)(ii) |
| New-dealer branch license (each additional branch) | $25,000 per branch | Ark. Code 23-112-302(c)(1)(B) |
You are treated as a used motor vehicle dealer if you are in the business of buying, selling, or trading used motor vehicles. Under Ark. Code 23-112-602, selling or attempting to sell five (5) or more used motor vehicles in one calendar year is prima facie evidence that you are a dealer and must be licensed and bonded.
[VERIFY against AMVC: whether low-speed vehicle dealers are a separate new-dealer license class with its own bond amount. The current statute text lists only new motor vehicle dealers ($50,000) and new motorcycle/ATV dealers and lessors ($25,000).]
What does the bond cover?
The bond protects the car-buying public, not the dealer. It guarantees that you will follow Arkansas motor vehicle dealer law, and it pays out if you do not.
For a used motor vehicle dealer (Ark. Code 23-112-607):
- The bond is an indemnity for any loss and reasonable attorney’s fees a retail buyer suffers because of an act by the dealer that violates the used motor vehicle dealer law.
- The surety is never liable for more than $25,000, no matter how many claims are filed.
- Proceeds are paid to the retail buyer or to the State of Arkansas after a judgment from an Arkansas court against the dealer.
- The surety does not have to pay a judgment obtained by fraud or collusion between the dealer and the buyer, or a judgment for conduct that is not a violation of the law.
For a new (franchise) motor vehicle dealer (Ark. Code 23-112-302):
- The bond is an indemnity for any loss a person suffers because of an act by the dealer that is grounds for suspending or revoking the license.
- The bond is executed in the name of the State of Arkansas for the benefit of any aggrieved party.
- The surety’s total liability for all claimants is capped at the bond amount, regardless of how many years the bond has been in force.
- Proceeds are paid after the Commission receives a final judgment from an Arkansas court.
In both cases, a paid claim is money the surety fronts on your behalf. You are legally required to repay the surety in full, which is why the bond is a guarantee of your conduct rather than insurance that protects you.
How much does the bond cost?
You do not pay the full bond amount. You pay an annual premium, which is a small percentage of the bond amount and is based mainly on your personal credit and business history.
[CLIENT FLAG: insert All n One pricing. Provide premium rate ranges by credit tier and one worked example, for example: “A $25,000 used dealer bond typically costs X% to Y% of the bond amount per year. With good credit, a $25,000 bond runs about $___ per year; a $50,000 new-dealer bond runs about $___ per year.” Do not publish a premium figure until All n One supplies it.]
Because the used dealer bond ($25,000) and the new/franchise dealer bond ($50,000) are different amounts, they carry different premiums. Applicants with multiple locations bonding at $100,000 will pay more than a single-location dealer.
Is this the same as the dealer license, or the other Arkansas dealer bond?
Two points of confusion come up often:
- The bond is not the license. The surety bond is one requirement you must satisfy to get and keep a dealer license. You still complete the full license application, pay the license fee, carry vehicle liability insurance, and meet the state’s location and other requirements.
- There are two dealer bonds, from two different agencies. If you sell used vehicles, your $25,000 bond is filed with the Arkansas State Police. If you hold a new-vehicle franchise, your $50,000 bond is filed with the Arkansas Motor Vehicle Commission. A franchised new-car dealership that also sells used cars is generally regulated as a new motor vehicle dealer; confirm your classification with the licensing agency if you do both.
This page covers the Arkansas dealer bonds only. It is not the same as a title bond (bonded title), a freight broker bond, or a sales tax bond, which serve different purposes.
How do I get bonded and file with the state?
- Confirm your license type. Decide whether you are applying as a used motor vehicle dealer (Arkansas State Police) or a new/franchise dealer, motorcycle/ATV dealer, or lessor (Arkansas Motor Vehicle Commission). This sets your bond amount.
- Apply for the bond. Request a quote for the correct amount ($25,000, $50,000, or $100,000). Approval is typically based on your credit and business background.
- Pay the premium and receive the executed bond. The surety issues the bond on the form the state or Commission approves, signed and sealed.
- File the bond with your license application. Submit the original bond to the correct agency along with the rest of your application (fees, insurance, location documentation, and any required dealer education).
- Keep the bond active. Renew the bond so it stays continuously on file for as long as you are licensed. A lapse can suspend or void your dealer license.
Frequently asked questions
How much is an Arkansas motor vehicle dealer bond?
The bond amount is $25,000 for a used motor vehicle dealer (single location), $100,000 for a used dealer with multiple locations, $50,000 for a new/franchise motor vehicle dealer, and $25,000 for a new motorcycle dealer, ATV dealer, or motor vehicle lessor. Each new-dealer branch license adds a $25,000 bond. You pay only a yearly premium, not the full amount.
Who do I file the bond with?
Used motor vehicle dealers file with the Arkansas State Police (Used Motor Vehicle Dealer Section, part of the Department of Public Safety). New/franchise dealers, motorcycle/ATV dealers, and lessors file with the Arkansas Motor Vehicle Commission, which is part of the Arkansas Department of Labor and Licensing.
Do I need a dealer license and bond if I only sell a few cars a year?
Selling or attempting to sell five (5) or more used vehicles in one calendar year is treated as being in the dealer business under Ark. Code 23-112-602, which means you must be licensed and bonded. If you are near that threshold, confirm your status with the Arkansas State Police before you sell.
What does the bond actually pay for?
It reimburses a buyer (or the state) for losses caused when a dealer violates Arkansas dealer law, after an Arkansas court judgment. For used dealers it also covers the buyer’s reasonable attorney’s fees. The surety never pays more than the bond amount, and it can refuse claims based on fraud or collusion.
If the surety pays a claim, do I owe that money back?
Yes. A surety bond is not insurance for you. If the surety pays a valid claim, you must repay the surety in full, plus costs. The bond protects the public; you remain responsible for your own conduct.
How long does the bond last, and how do I keep it active?
The dealer license runs on the calendar year and renews in January (used dealers) or expires December 31 (Commission licenses). Keep your bond continuously on file and renew it on time so your license does not lapse. [VERIFY against Arkansas State Police bond form: whether the used dealer bond is written as a continuous bond or a fixed one-year term that must be re-filed.]
Can bad credit stop me from getting bonded?
Not usually. Premiums are priced partly on credit, so weaker credit means a higher rate, but bonds are widely available across credit levels. Ask for a quote to see your exact cost.
Can I use one bond for more than one used-car location?
Yes. Instead of a separate $25,000 bond for each location, a used dealer with multiple locations may file a single $100,000 blanket bond that covers all licensed locations, under Ark. Code 23-112-607(d)(1)(B).
