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.
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: Up to $25,000, minimum $100,000, verify with Motor Vehicle Commission
Required By: Kentucky Motor Vehicle Commission
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.
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.
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.
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.
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.
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.