Kentucky Auto Dealer License Guide
You need to obtain a Kentucky dealer license if you want to sell more than 5 vehicles in the state within a 12 month period. The licenses are issued by the Kentucky Motor Vehicle Commission, which is the authority that oversees dealership activities.
Determine Which Type of License You Need:
- New Motor Vehicle Dealer
- Used Motor Vehicle Dealer
- Motor Vehicle Leasing Dealer
- Wholesale Motor Vehicle Dealer
- Motor Vehicle Auction Dealer
- Motorcycle Dealer
- Restricted Dealer/Mobility Dealer
- Restricted/Automotive Recycling Dealer
- Recreational Camper Dealer
Obtain a Permanent Business Location
In order to comply with the Kentucky car dealer license criteria about your business location, you have to do the following:
- Provide proof that you own or rent an established place of business with a display lot and customer parking area of at least 2,000 square feet.
- The address of the established place of business has to identify the exact location and has to have a mailbox.
- Attach photos of your permanent business sign (not necessary for wholesale dealers), front, rear, left front and right front of the lot, and exterior and interior of the office space.
- Attach drawings of the premises, including the sales office, vehicle display/storage area, and dealership sign.
- Restricted/automotive recycling dealers need to obtain a certification by zoning officials authorities, stating the business location is legally compliant. They have to get a permit for running a salvage and recycling yard issued by the state Department of Highways.
Compile the Required Documents
Getting licensed involves meeting all of the Kentucky dealer license requirements. You need to provide a list of documents:
- A current financial statement.
- You have to get a business name registration from the Kentucky Department of Revenue. The name should illustrate what kind of dealership activities you are engaged in.
- Sole proprietors, corporations and partnerships need to get an Assumed Name Certificate. Limited liability companies have to submit a copy of their Articles of Organization.
- You need an Employer Identification Number (EIN) from the IRS.
- Franchise agreement with the manufacturer whose vehicles you will be selling (for new vehicle dealers).
- Garage liability insurance: $250,000 per person, $500,000 per occurrence and $250,000 for property damage. Restricted/mobility dealers have to obtain $1 million garage liability insurance.
- Restricted/automotive recycling dealers have to showcase $100,000 minimum net worth.
- Applicants for all license types except restricted/automotive recycling dealers have to obtain salesperson licenses for all salespersons and owners.
Obtain a Surety Bond
To obtain your Kentucky auto dealer license, you will have to get a surety bond. The amount of the Kentucky auto dealer bond is determined by the Commission. The range is between $15,000 and $100,000. The Commission may require auction dealers to get a bigger amount, if deemed necessary.
The cost of your bond depends on your financial strength. It represents a small percentage of the total bond amount. The stronger your personal credit and business finances are, the lower the bond price would be. You can get more information in our most frequently asked surety bond questions.
- Fill out our online application form to obtain a free bond quote for your auto dealer license. It takes 5 minutes and you will be able to lock your rate for the next 90 days (in case you want to purchase the bond).
Submit Your Dealer License Application
You have to fill in the KY dealer license application, which is available online. If you want a paper application, you have to mail a $7 check or money order payable to the Kentucky State Treasurer to the Commission.
Fee: The fees that you have to cover to launch your dealership include:
- $40 application
- $20 salesperson license
- $20 salesperson criminal background check
- $100 yearly licensing
You have to mail your application and supporting documents to:
Kentucky Motor Vehicle Commission
105 Sea Hero Road, Suite 1
Frankfort, Kentucky 40601
The Commission meets every second Friday of the month. If you want your application to be reviewed at its next meeting, you have to make sure it is received minimum 10 working days before that.