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Kentucky Motor Vehicle Dealers Surety Bond

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Motor Vehicle Dealers in Kentucky are required to have a "Motor Vehicle Dealer Surety Bond" in the amount of $100,000 and a license to operate a dealership. The surety bond ensures compliance of state laws and ethical vehicle sales practices.

Surety Bond Requirements:

Kentucky vehicle dealers are required to have a $100,000 surety bond for the following licenses:

  • New Motor Vehicle Dealers (also known as franchise dealer)
  • Used Motor Vehicle Dealers (also known as a car dealer or auto dealer)
  • Wholesale Dealers
  • Motorcycle Dealers
  • Motor Vehicle Leasing Dealer
  • Auction Dealers (auction dealers surety bond requirement may be more than $100,000 which is set by the Commission)
  • Automotive Recycling
  • Restricted Dealer / Mobility Dealer (must also provide evidence of a minimum $100,000 in business assets)
  • Recreational Camper Dealer

  • The surety bond requirements may be waived if other forms of security are provided of equal amount.

    License Requirements:

    1. Dealer applicants can obtain a vehicle dealer license from the Kentucky Motor Vehicle Commission.
    2. Applicants must complete the motor vehicle dealer application, including the financial statement and pay the license fees.
    3. Obtain garage liability insurance with a minimum coverage amount of $250,000 per person, $500,000 for each incident, and $250,000 property damage. A copy of the policy can be submitted after the application has been approved. (Restricted and mobility dealers require a minimum of $1,000,000 in liability insurance.)
    4. Applicants must have a business name that includes wording such as "Used Cars," "Auto Sales," etc. Franchise dealers can use the manufacturer name in their business name. Wholesalers, leasing, brokers, and consignment dealers can not use any of these words in the business name.
    5. Dealers must have an established place of business that includes an enclosed building (at least 100 sq ft) with office fixtures such as a desk, chair, and file cabinet. They must have a business telephone and electricity. They must have a display lot and customer parking on a hard surface (such as asphalt, concrete, or gravel). The sales lot can not allow for drive through traffic. The business office can not be a residence. Permanent signage is required that is visible from the roadway, includes the business name and has at letters that are at least 9" in height. (Wholesale dealers do not have to meet the signage requirement.) Dealer location must also meet local zoning requirements.
    6. All vehicle salespersons must be licensed to sell vehicles.
    7. If a franchise or new vehicle dealer, provide a copy of the franchise agreement.

    How Much Will This Bond Cost?

    The premium that you pay for a Kentucky Motor Vehicle Dealer Surety Bond is dependent on credit, business financial statements and experience in vehicle sales industry. Our rates start at 1% of the bond amount with good credit. Contact our Surety Bond Specialists for a free quote that fits your specific situation.

    Related Links:

    Kentucky Motor Vehicle Commission
    Kentucky Dealer License Information

    More Surety Bond Questions?

    Check out our FAQ page or What’s a Surety Bond? page. Should you need or choose to buy a surety bond, buy from us. SuretyGroup.com has been underwriting surety bonds throughout the U.S. for more than 35 years. When you work with us, you enjoy the unique benefit of dealing with a team of highly experienced surety agents with in-house underwriting authority. This allows you to receive competitive, low rates, quick approvals, and immediate bond delivery. In most cases, your bond will be delivered within 24 hours after you apply for it.


    For a downloadable application