Kansas Auto Dealer Bond

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What Is a Kansas Auto Dealer Bond?

Car dealerships operating in Kansas must have a valid license to run their business in line with state regulations. Obtaining a license requires the dealership to secure a Kansas auto dealer bond which protects customers from fraud and illegal practices.

A Kansas auto dealer bond makes it more likely that licensed auto dealers will comply with the rules set by the state.

How Does a Kansas Auto Dealer Bond Work?

Similar to other Kansas surety bonds, an auto dealer bond is a contract between three parties who all benefit from the agreement in some way.

The Obligee

The obligee is the state agency requiring the auto dealer to post the bond so that the auto dealer will comply with state laws and regulations.

The Principal

The principal is the auto dealer who must obtain the bond to get licensed in the state and operate their dealership legally.

The Surety

The surety provides the bond to the principal for a fee. If a claim is made on the bond, then the surety pays the claim and the principal pays the surety back over time.

Obligee Details for Kansas Auto Dealer Bonds

In the state of Kansas, any licensed auto dealer must secure a bond to fully comply with licensing requirements. The obligee of a Kansas auto dealer bond is the Kansas Department of Revenue. Contact information for the obligee can be found below:

Kansas Department of Revenue

Division of Vehicles

Dealer Licensing Bureau

P.O. Box 2369

Topeka, Kansas 66601


Do I Need a Kansas Auto Dealer Bond?

Several types of motor vehicle dealers operating in Kansas must have a valid license and a Kansas auto dealer bond to do business. These include:

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

How Do You Get a Kansas Auto Dealer Bond?

When starting the licensing process as an auto dealer, you will also want to get a quote for your Kansas auto dealer bond. You can do so by submitting a short application online. The surety company will provide you with your bond pricing and guidance on how to complete the bonding process.

What Does a Kansas Auto Dealer Bond Cost?

Starting January 1st, 2022, state laws require newly licensed auto dealers in Kansas to obtain a $50,000 bond (until then, the required bond amount remains at $30,000). You pay a percentage of the total bond requirement, typically ranging from 1 to 10 percent.

A Kansas auto dealer bond is a form of credit extended to your dealership to cover bond claims. When a customer files a successful claim against the bond, the surety company pays for the claim amount and you as the dealership repay the claim.

Because of this structure, your personal credit is a factor in determining the cost of your Kansas auto dealer bond.

Can I Get a Kansas Auto Dealer Bond with Bad Credit?

Poor credit due to late payments, judgments, or liens may mean you are a higher risk for a future bond claim. High-risk auto dealers can still obtain bonds, but they will pay more for a Kansas auto dealer bond than those who have excellent or good credit.

Bond Expiration Date and Terms for Kansas Auto Dealers

Similar to other states requiring a surety bond from licensed auto dealers, there is no set expiration date for a Kansas auto dealer bond.

How Do I Renew My Kansas Auto Dealer Bond?

Auto dealers must renew their bond at the same time their auto dealer license is renewed with the state. You’ll receive reminders to renew your bond, but a failure to renew a Kansas auto dealer bond could lead to an invalid auto dealer license.

Frequently Asked Questions

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.

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.

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.

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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