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Kentucky Auto Dealer Bond

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What is a Kentucky Auto Dealer Bond?

Licensed auto dealers in Kentucky are required to obtain a Kentucky auto dealer bond. As a type of surety bond, a Kentucky auto dealer bond acts as a guarantee that a dealership will operate in compliance with state laws and regulations. If a customer of a dealership experience financial damages due to illegal or fraudulent business practices, a claim can be made against the bond for reimbursement.

A Kentucky auto dealer bond involves three parties. The licensed auto dealership is the principal, while the state authority requiring the bond, the Kentucky Motor Vehicle Commission, is the obligee. The surety company provides the bond to the licensed auto dealer and guarantees claims will be paid. It is important to note that any successful claims are repaid by the licensed dealership.

Do I Need a Kentucky Auto Dealer Bond?

Several different types of motor vehicle dealers operating in Kentucky must have a valid license to do business, as well as a Kentucky auto dealer bond. These include:

  • Used vehicle dealers
  • New (franchised) vehicles dealers
  • Wholesaler dealers
  • Auction dealers
  • Motorcycle and leasing dealers

Obligee Details for Kentucky Auto Dealer Bonds

In the state of Kentucky, any licensed auto dealer must also secure a bond in order to fully comply with licensing requirements. The obligee of a Kentucky auto dealer bond is the Motor Vehicle Commission under the Kentucky State Treasurer. Contact information for the obligee can be found below:

Motor Vehicle Commission Office

105 Sea Hero Road, Suite 1

Frankfort, Kentucky 40601

Phone: 502-573-1000

What Does a Kentucky Auto Dealer Bond Cost?

Depending on the type of auto dealership you operate, a Kentucky auto dealer bond between $15,000 and $100,000 is required. Fortunately, you are not responsible for paying the entire bond amount up front. Instead, the surety company providing your Kentucky auto dealer bond charges you a percentage of the bond, ranging from 1 to 3%.

Some auto dealers will pay a higher rate for their Kentucky auto dealer bond because they pose a higher risk to the surety company. Personal credit is a major factor in determining the bond price. Negative marks like bankruptcy, tax liens, or civil judgments on your credit report are a red flag in terms of your risk to the surety. This does not mean you cannot get a Kentucky auto dealer bond; it may mean you will pay a higher percentage to get covered.

How Do You Get a Kentucky Auto Dealer Bond?

You can start the process of securing the Kentucky auto dealer bond you need by submitting a simple form online. You will receive a free quote based on your business details, and instructions on how to finalize bonding for your dealership.

Bond Expiration Date and Terms for Kentucky Auto Dealers

Similar to other states requiring a surety bond from licensed auto dealers, there is no set expiration date for a Kentucky auto dealer bond. Instead, auto dealers must renew their bond at the same time their auto dealer license is renewed with the state. Failure to renew a Kentucky auto dealer bond could lead to an invalid auto dealer license.


Frequent Questions

What does an auto dealer bond cost?

Costs are a percentage of the auto dealer bond amount that's required of you, which is based on your personal credit. Use our bond pricing tool to get a quick ballpark estimate.

Can I get a bond with bad credit?

Yes. You can get you approved for a bond regardless of your credit situation. However, the price will increase. You can apply to get an instant approval. As the largest writer of surety bonds in the U.S., we have access to high risk markets that many other agencies do not.

How long does the application take?

It only takes minutes, as we can approve you for your bond instantly online. You can get a no obligation quote on our website at any time.

Can I get auto dealer bond insurance to protect myself?

No. An auto dealer bond does not protect you, it protects the public. However, you can protect yourself or your customers by getting fidelity bonds.


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Our company has been with JW Surety for several years now so when we needed to obtain a bond for a new company, we immediately went to them for help. Our rep, Melissa, was extremely helpful and prompt which made the process extremely easy for me.
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Trying to get a local Surety Bond was like driving a car on three tires. I searched Surety Bonds and found JW Surety Bonds. I got online and filled out the information and with in 30 minutes received a response from Melissa. She was informative, friendly and helpful. One more super satisfied customer.

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About JW Surety Bonds
We are a family owned and operated agency established in 2003. We started with just two people, and grew to become the largest volume bond producer in the nation with 50+ employees. Since day one, our team focus has been on providing our clients low rates, an easy process, and the best in customer service. Learn more about our company.