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Arkansas Motor Vehicle Dealer, Arkansas Auto Dealer Bond:

The Arkansas Motor Vehicle Dealer bond is a License Surety Bond that serves to protect Arkansas citizens by providing a path for recourse in situations where an Auto Dealer does not adhere to the laws, rules, and regulations as set in Arkansas state legal statutes. An Arkansas Motor Vehicle Dealer bond may be required as part of the Motor Vehicle Dealer licensing and/or vehicle registration process.

In Arkansas, the required Motor Vehicle Dealer bond amounts are as follows:

• Arkansas, Auto Dealership bond requirement - $50,000 Surety Bond
• Arkansas, Truck Dealership bond requirement - $50,000 Surety Bond
• Arkansas, RV Dealership bond requirement - $50,000 Surety Bond
• Arkansas, Motorcycle Dealership bond requirement - $25,000 Surety Bond
• Arkansas, ATV Dealership bond requirement - $25,000 Surety Bond
• Arkansas, Scooter Dealership bond requirement - $25,000 Surety Bond
• Arkansas, Lessor bond requirement - $25,000 Surety Bond

You should always check with the Arkansas Motor Vehicle Commission, or requesting agency, for the most current required Arkansas Motor Vehicle Dealer bond amount as well as the required bond forms.

How to Get an Auto Dealer Bond in Arkansas?

The first step is to understand exactly how an Arkansas auto dealer surety bond works between all the parties involved:

• The obligee is the official agency or entity that requires the auto dealer to have a bond. The term comes from the fact that they create specific obligations for all affected parties to follow. In this case, the obligee is the Arkansas Motor Vehicle Commission on behalf of Arkansas citizens, an entity tasked with keeping drivers and roadways safe by regulating vehicle sales among other things.
• The principal is the entity who is required to become bonded. This party is whoever is subject to enforcement or regulation by the party identified as the obligee. The principal in an Arkansas motor vehicle dealer bond is you, the dealer who takes out the bond.
• The surety is the entity that actually grants the bond. In the event that the obligee (Arkansas) makes a claim against the principal (you), the surety is responsible for evaluating the validity of the claim and paying out any compensation necessary up to the limit of the bond. Afterward, the surety collects that amount from the principal. Essentially, the surety acts as an intermediary between the obligee and the principal.

Once you understand what a surety bond is and why you need one, the next step is to apply for a bond that meets the state requirements in Arkansas. You will need to find a surety that offers applicable bonds and then go through the application process. Typically, that involves providing the following information:

• Type and amount of bond needed
• Basic information about the business and business owner
• Basic information about liabilities and assets
• Additional information requested by the surety

Whether or not you're approved for an Arkansas auto dealer bond depends on whether the surety company underwriting the bond considers you to be an acceptable risk. That determination is based on your credit and business history, but a low credit score or a past bankruptcy are not necessarily disqualifiers. Quality surety companies make it a priority to get more principals approved as quickly as possible.

What Happens Without an Arkansas Auto Dealer Bond?

The cost of a state-required bond is not the most substantial business expense, but it's understandable that auto dealers in the early stages would want to avoid paying it. Over the long-run, however, not having an Arkansas auto dealer surety bond costs much more than paying for one, even year after year. Without a bond, it's impossible to meet the requirements to obtain an Arkansas auto dealer license. And without a license, selling vehicles commercially is illegal. These are some of the potential penalties:

• Hefty fines and fees
• Jail time
• Being denied a license for life
• Bad PR

Obtaining an Arkansas auto dealer bond is a requirement, but it should really be thought of as a prerequisite. Without one, it's impossible for you to open your doors and keep your business in good standing with both the state and the customers you serve. Bonds may be an unwelcome expense, but they are far better than the alternatives.

Applying for an Arkansas Motor Vehicle Surety Bond

writes Arkansas Motor Vehicle Dealer bonds. We can assist both clients with good credit, and clients with bad credit. Typically, the worse the credit, the higher the surety bond premium will be. In either case, we always work to get the best quote for you. Viking has partnered with markets that welcome Arkansas Motor Vehicle Dealer bond applications and provide competitive quotes for them.

(See Also: Cost Expectations for Auto Dealer Bonds)