Kansas Car Dealer License Guide

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Surety Bond Professionals is a family owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your Kansas car dealer bond needs.

Learn how to get a Kansas car dealer license, and contact us today to request a quote on the bond you need.

What Are the Different Types of Kansas Vehicle Dealer Licenses?

The Florida Department of Highway Safety and Motor Vehicles (DHSMV) Bureau of Dealer Services issues these types of dealer licenses:

  • New/used vehicle dealer
  • Used vehicle dealer
  • Salvage vehicle dealer
  • Wholesale vehicle dealer
  • Auction motor vehicle dealer

This article focuses specifically on the licensing of dealers selling used vehicles.

What Are the Steps in the Licensing Process?

  • Before applying for a Kansas used vehicle dealer license, you must:
  • Secure a permanent business location and obtain a local zoning certificate
  • Purchase automobile liability insurance in your business name for bodily injury and property damage 
  • Purchase a Kansas auto dealer bond in the amount of $30,000
  • Register your business with the state and verification from the county treasurer that you are no in arrears on any personal property taxes

Depending on your business structure (e,g, sole proprietorship partnership, LLC, corporation) you may also need to provide personal credit references and/or copies of business formation documents.

When you submit your completed dealer license application, you must include the documentation associated with the tasks listed above and payment for the required fees. Mail the entire package to the Kansas Department of Revenue, Division of Vehicles, in Topeka. 

Why is a Kansas Auto Dealer Bond Required?

A Kansas auto dealer bond provides financial protection for the state of Kansas and its consumers. Specifically, it:

  • Guarantees that a licensed auto dealer will abide by all applicable laws and regulations
  • Absolves the state of legal liability for damages consumers incur due to the unlawful conduct of a licensed dealer
  • Gives the state a way to collect overdue taxes, fees, and/or fines owed by the dealer 
  • Legally obligates the dealer to pay valid claims against the bond

How Are Kansas Auto Dealer Bond Claims Paid?

Although the terms of the bond require the dealer (known as the bond’s “principal”) to pay all valid claims, typically the company guaranteeing the bond (the “surety” in the legally binding surety bond agreement) will pay it initially and then be reimbursed by the principal. 

How Much Does a Kansas Auto Dealer Bond Cost?

The annual premium for a Kansas auto dealer bond is a small percentage of the required bond amount set by the Kansas Department of Revenue (the “obligee” mandating the purchase of the bond). The surety establishes the premium rate for each bond based on the underwriters’ assessment of the principal’s creditworthiness as indicated by the principal’s personal credit score. 

A well-qualified principal with good credit usually pays a premium rate in the one to three percent range, making the annual premium for a $30,000 bond as low as $300. A principal with lesser credit will pay a substantially higher premium rate.

Our surety bond professionals will get you the Kansas car dealer bond you need at a competitive rate.