Kentucky Auto Dealer Bond

If you sell more than five cars in a year within Kentucky, you are required by the Kentucky Motor Vehicle Commission (KMVC) to register as a licensed motor vehicle dealer to comply with Kentucky Revised Statutes Chapter 190. You must purchase and maintain a $25,000-$100,000 auto dealer bond as part of that licensing process. Our $25,000 Kentucky auto dealer bond starts at $250. Get started with our application below.

IMPORTANT: The Kentucky Motor Vehicle Commission meets every second Friday of each month. The Commission must receive your license application at least ten working days before their meeting.

Sample Payment and Performance Bond Form
Auto Dealer Bond

Bond Amount: Up to $25,000, minimum $100,000, verify with Motor Vehicle Commission

Required By: Kentucky Motor Vehicle Commission

green checkmark
Acceptance Guaranteed
green checkmark
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
Get QuotePurchase

How Much Does a Kentucky Motor Vehicle Dealer Bond Cost?

The price for a Kentucky auto dealer bond depends on a few things, but the most important is your credit score. Other factors include how much experience you have in the car dealership business and which insurance company provides the bond. Generally, the bond cost falls between 0.6% and 10% of the required bond amount. The better your credit score, the cheaper the bond will be. The lowest rate for our $25,000 Kentucky auto dealer bond is $250. 

One way to lower the bond cost is to purchase a longer-term bond. If you choose a multi-year bond, we can offer you a yearly discount of at least 15%. We collaborate with over 10 insurance companies, enabling us to find your most competitive price. If you come across a better offer elsewhere, let us know, and we'll try to provide you with an even more affordable rate.

Get Quote
purple moneyDecorative Purple Dollar Sign

Commonly Asked Questions

What is a Kentucky Auto Dealer Bond?

A Kentucky auto dealer bond is a contract between the surety company, the auto dealer (you), and the Kentucky Motor Vehicle Commission (KMVC). In this contract, the surety company promises that you will follow the laws and rules outlined in Kentucky Revised Statutes Chapter 190, as required by the KMVC. If you don't follow these rules, like not paying taxes or engaging in fraud, a claim can be made against the bond to compensate those affected.

The surety company investigates the claim to make sure it's valid. If it is, they will pay up to the maximum bond coverage. After that, you'll need to repay the surety for the money they paid out.

‍Who Needs a Kentucky Auto Dealer Bond

According to Kentucky Revised Statutes Chapter 190, anyone selling new or used motor vehicles or recreational vehicles as a dealer, wholesaler, or distributor must get a license from the Kentucky Motor Vehicle Enforcement Division. To get this license, you may need a Kentucky motor vehicle surety bond.

The Kentucky Motor Vehicle Commission will tell you when you need to prove you have an auto dealer bond. Alternatively, you can show that you have enough money or other financial arrangements, which the Kentucky Motor Vehicle Commission might accept instead of a bond.‍

How Fast Can I Obtain the Kentucky Motor Vehicle Dealer Surety Bond?

You can get your surety bond in as little as 4 business hours after you complete the application, as long as you make the necessary payment when we send you the payment link.

How do Bond Claims Work on a Kentucky Auto Dealer Bond?

A claim can be filed on a Kentucky auto dealer bond if a dealer does not follow the law or acts unethically, such as neglecting to remit sales taxes to the government or engaging in title-related fraud. The affected parties can file a claim against the bond to seek financial compensation for their losses. At that time, a surety company is responsible for investigating the claim's legitimacy.

If the claim proves valid, the surety company will provide compensation, and only up to the maximum bond amount stipulated in the bond agreement. However, it's important to note that the dealer is obligated to repay all the funds disbursed by the surety company. This mechanism ensures that the bond serves as a protective measure, benefiting both the obligee and the wider public by safeguarding against potential financial losses from the dealer's failure to adhere to statutory requirements.

How Can I Lower the Cost of my Kentucky Auto Dealer Bond?

The most immediate way to lower the cost of your Kentucky auto dealer bond is by purchasing a multi-year bond. We typically get a 15% annual discount when a bond is purchased for longer than 1 year. Additionally, for more long-term solutions, as you gain more experience as a dealer, you may receive a lower rate for your bond with more years of experience. The primary way to reduce the cost of your bond long-term would be to increase your credit score so that you may receive a better rate the next time you apply.

How Often Do I Need to Renew My Motor Vehicle Dealer Bond?

You have the flexibility to decide the length of time your auto dealer bond will be valid. However, it's essential to note that all Kentucky auto dealer bonds share the same expiration date, December 31st. This particular date aligns with the expiration of all Kentucky auto dealer licenses. Therefore, you are responsible for obtaining a new bond or providing evidence of your existing coverage before October 17th of each year. Doing so ensures your dealership maintains its legal authorization to operate within Kentucky.

Get a quote
Get a quote