Kansas Auto Dealer Bond

If you sell more than five cars a year in Kansas, then you are required by the Kansas DMV to be licensed and bonded as an auto dealer. This requirement protects members of the general public from auto dealer malpractice in Kansas. Individuals can apply to become licensed auto dealers through their local DMV, and as part of that process, they are required to obtain the $50,000 Kansas auto dealer bond.

Sample Payment and Performance Bond Form
Kansas Auto Dealer Bond Sample Form
Auto Dealer Bond

Bond Amount: $50,000

Required By: Kansas Department of Revenue Division of Vehicles

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Refund within 5 days if not satisfactory
1 Year Bond Starts at
1 Year Bond Price
of bond amount, based on credit check
based on your credit history
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How Much Does a Kansas Motor Vehicle Dealer Bond Cost?

Various factors can impact the cost for a $50,000 Kansas auto dealer bond, but the price for a one-year bond starts at $350 and is typically about 0.7% to 10% of the bonded amount. The main factor that impacts the cost of the bond is your credit score. The better your credit score is, the better your bond price can be. The other factors that can impact your bond cost are your number of years in the dealership industry, the financial standing of the dealership, and the specific insurance company that is providing the bond. 

One way to lower the cost of your bond is by purchasing a longer-term bond. We can offer around a 15% annual discount for a multi-year bond. We are also partnered with over 10 insurance companies, which allows us to offer the best rate on the market. If you find a better deal, please let us know, and we’ll do our best to beat that rate. 

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Commonly Asked Questions

What is a Kansas Auto Dealer Bond?

A Kansas auto dealer bond is a three-party contract involving the surety company (the surety), the auto dealer (the principal of the bond), and The Kansas Division of Vehicles, Dealer Licensing Bureau (the obligee). In this agreement, the surety company guarantees that the auto dealer will adhere to the state auto dealer guidelines. If the dealer fails to comply with these terms—for instance, by not remitting sales taxes to the government or committing title fraud—a claim can be filed against the bond to provide financial compensation to the affected parties.

The surety company conducts a thorough investigation to determine the claim's validity. If it's deemed valid, the surety company will pay out an amount up to the maximum bond coverage. Afterward, the principal (the dealer) will be responsible for repaying the surety company for claim payments. 

Who Needs a Kansas Auto Dealer Bond?

According to Kansas Statutes, Chapter 8, Article 24, any individual selling motor vehicles, trailers, or recreational vehicles as a dealer, wholesaler, or distributor must obtain the relevant auto dealer license from The Kansas Division of Vehicles, Dealer Licensing Bureau. You must obtain a Kansas motor vehicle surety bond to secure this license. The minimum number of vehicles you can sell before being considered a professional dealer is two. 

‍How Do I Purchase the Kansas Motor Vehicle Dealer Surety Bond?

The process for getting the Kansas motor vehicle dealer surety bond is straightforward. It starts with the completion of an application form, where we gather essential details about your business, such as:

  • The name of the dealership and any applicable Doing Business As (DBA)
  • The dealership’s physical address
  • The dealership owner's legal name and SSN (a soft credit check is required)

Once you've completed our application, we will use it to seek out the most affordable quotes from our network of more than 10 insurance partners. We will send you a payment link if you are satisfied with the quote. Once the payment is made, we will promptly email you the bond.

What Kind of Actions can result in a Claim Against my Bond?

Auto dealer bond claims happen when a customer has experienced an issue with their dealership due to unethical practices that go against the state’s guidelines. These problems can include hidden issues with car titles, fraud about a car's mileage, selling unsafe cars, lying about a car's condition, not giving important documents, breaking agreed-upon deals, not delivering car titles, disagreements about payments, not paying the proper taxes, selling stolen cars, and misusing temporary tags. This is not an exhaustive list of all the unethical practices that can lead to a claim being filed against your bond. 

These claims help people get money back or fix the issues they face when buying cars. 

What Are the Other Requirements to get a Kansas Auto Dealer License?

Getting an auto dealer license in Kansas involves several steps you must complete before being legally able to work. It's not just about having an active auto dealer bond; you must also ensure all the necessary documents are in order.

To meet the requirements, you must have a physical business location, a working phone, follow zoning rules, and have a valid Sales Tax Registration number. Once you've done all this and submitted your information, you'll be informed when you must complete mandatory dealer training classes.

How do I Renew my Kansas Auto Dealer License?

All Kansas auto dealer licenses have a standard expiration date of December 31st each year, but you can select how long you want your bond term to be. To keep your license valid, you must provide evidence of a new bond or the continuation of your existing bond before December 31st each year. Additionally, we'll contact you approximately 30 days before your bond expires to ensure your license stays active.

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