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.
Please note this page is for car dealer licensing. If you're trying to register a vehicle with a missing title, a separate Lost Title Bond is required.
Bond Amount: $50,000
Required By: Kansas Department of Revenue Division of Vehicles
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.
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.
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:
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.
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.
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.
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.