How to Get an Arkansas Dealers License: Bond, Education, and Fees

To meet the Arkansas dealer’s license requirements, you need a dedicated business location that passes an on-site inspection, a $25,000 surety bond, garage liability insurance at state minimums, completion of a three-hour approved education course, a sales tax permit from the Department of Finance and Administration, and a $250 application submitted to the Arkansas State Police Used Motor Vehicle Division. Every piece has to be in place before the license is issued, so it pays to assemble the file in order rather than apply and scramble.

Who Needs the License

Arkansas defines a used motor vehicle dealer broadly: anyone who sells, brokers, exchanges, or leases used vehicles with the intent to make a profit, or who is in the business of buying and selling used vehicles.¹ Selling or attempting to sell five or more used vehicles in a single calendar year creates a legal presumption that you are a dealer. That presumption is rebuttable, but the burden is on you.

Staying under five sales is not a safe harbor. A single transaction with clear commercial intent — buying a car to flip it, for example — can be treated as unlicensed dealing. The five-vehicle rule just makes the state’s case easier to prove.¹

Business Location Standards

You cannot operate from a home address or a P.O. Box. The State Police require a dedicated physical location used primarily for selling used vehicles, and it has to meet specific standards before an inspector will sign off.²

A sign identifying the business as a used motor vehicle dealership, showing the dealership name, visible from the nearest street, road, or highway.
A business telephone number listed in the dealership’s name in an online directory such as yp.com or namesandnumbers.com.
At least one lockable file cabinet or repository to keep business records secured.
Photographs of the location and sign to submit with the application.

If you lease the property, keep a signed copy of the lease. You will need it when you register for your sales tax account.

Surety Bond and Liability Insurance

Two financial requirements have to stay in force the entire time you hold the license. Letting either one lapse triggers an automatic summary suspension — no hearing required.³

Surety Bond

Every dealer must carry a corporate surety bond of at least $25,000. The bond pays retail buyers (up to the $25,000 cap) if a court enters a judgment against the dealer for violating state law. Dealers running more than one location can buy a single $100,000 bond covering all sites instead of separate bonds for each.⁴

The annual premium depends largely on your personal credit. Dealers with strong credit typically pay 1–3% of the bond amount (roughly $250 to $750 per year for a $25,000 bond). Weaker credit costs more.

Garage Liability Insurance

Coverage must meet at least the Arkansas Motor Vehicle Safety Responsibility Act minimums:⁵

$25,000 for bodily injury or death of one person per accident
$50,000 for bodily injury or death of two or more people per accident
$25,000 for property damage per accident

The application requires you to authorize release of your insurance information to the State Police so coverage can be verified at any time.⁶

Mandatory Pre-Licensing Education

Before a license is issued, a full-time employee of your dealership must attend a department-approved educational seminar lasting at least three hours.⁷ The attendee has to stay for the entire course; leaving early delays the license until the requirement is fulfilled. Skipping it can also lead to suspension or revocation even after the license is in hand.³

The Application, Fees, and Inspection

The application is only available through the Arkansas State Police website. Printed copies are no longer handed out at the Used Motor Vehicle Division office.⁶ An owner of the dealership must sign it, and it must be verified by oath or affirmation under penalty of criminal prosecution for false statements.²

Submit the following with the form:

Photographs of your business location and sign
Proof of your surety bond (minimum $25,000)
Proof of garage liability insurance at state minimums
Names and addresses of all owners, partners, or entities with an ownership interest
Names and addresses of all salespersons and sales managers who will represent the dealership
Name and contact information for the person designated to receive legal process on the dealership’s behalf
Proof of a business phone listed in an online directory

The application fee is $250 for a primary location.⁸ Plan for these additional costs:

Dealer master plate: $100
Each additional dealer plate: $25⁹
Sales tax permit: $50, paid to the Department of Finance and Administration
Annual surety bond premium: roughly $250 to $750 or more, depending on credit
Garage liability insurance: varies by coverage and lot size

Once the State Police review the application, a Used Motor Vehicle Division inspector contacts you to schedule the first on-site inspection. At least one owner must be present. If the dealership passes, the inspector sends a report to the Little Rock office and the license is emailed to you.²

Sales Tax Permit

The dealer’s license does not cover sales tax. You need a separate permit from the Arkansas Department of Finance and Administration, which costs $50 and is paid electronically when you apply online.¹⁰ Any outstanding tax liability has to be cleared before a new permit will be issued. Processing takes up to two weeks. The business address cannot be a P.O. Box, and leased locations require a signed copy of the lease.

Keeping the License Active

Three ongoing obligations tend to catch newly licensed dealers off guard.

Records. You must keep all business records, including vehicle transaction records and title documents, for at least five years, stored in the lockable cabinet at your licensed location.¹¹ Inspectors check during site visits.

Bond, insurance, and judgments. If either the bond or the insurance lapses, the license is summarily suspended. The same happens if a court judgment against you goes unsatisfied for 30 days; the suspension stays in place until you prove it is paid.³

Relocation or closure. If you stop conducting business at your licensed location, you have ten calendar days to notify the Director in writing. Miss that window and the license is automatically suspended until you meet every requirement from scratch. Selling vehicles while suspended is a felony, so a quiet move to a new lot without the paperwork can turn into a serious problem fast.

Renewal

The license renews annually. The fee is $250 for a primary location and $125 for a satellite location. An inspector visits about a month before expiration, or during the expiration month, and the renewal cannot be processed until that inspection is passed.⁶ Renewal applications are given priority over new applicants to keep active dealers from losing their tags during the processing window.

1
Arkansas Department of Public Safety. Used Motor Vehicle Buyers Protection Statute
2
Arkansas State Police. Requirements To Become A Licensed Arkansas Used Motor Vehicle Dealer
3
Legal Information Institute. 015.01.22 Ark. Code R. 004 – Used Motor Vehicle Dealer Licensing
4
Justia Law. Arkansas Code 23-112-607 – Dealer’s License
5
Justia Law. Arkansas Code 27-19-713 – Motor Vehicle Liability Policy
6
Arkansas Department of Public Safety. Used Motor Vehicle Dealer License Application Form
7
Legal Information Institute. Used Motor Vehicle Dealer Training Procedure
8
Justia Law. Arkansas Code 23-112-608 – License Certificate
9
Code of Arkansas Rules. 27 CAR 15-101 – Definitions
10
Arkansas Department of Finance and Administration. Register for a Tax Account
11
Code of Arkansas Rules. 23 CAR 358-1239 – Retention of Records