Kansas Auto Dealer Bonds, and More

How much does an auto dealer bond cost in Kansas?

Auto dealer surety bonds (also called motor vehicle dealer bonds) are mandated by the Kansas Department of Revenue as part of the licensing requirements for car dealerships to conduct business in the state. The Department of Revenue sets the total bond amount at $30,000.

The surety company determines your premium rate, which is the percentage of the total bond amount you pay as the premium. Premium rates for Kansas auto dealer bonds typically cost between 1% and 3% of the total bond amount.

During the application process, the surety company evaluates your personal credit, financial statements, industry experience, and licensing history. Applicants with good credit generally receive the lowest rates, however, bad credit will not prevent you from securing a Kansas auto dealer bond. EZSurety still offers competitive rates to individuals with low credit scores or other financial issues.

Why are auto dealer bonds important in Kansas?

Kansas auto dealer bonds provide protection for customers, creditors, and the state government. When a Kansas motor vehicle dealer posts a surety bond, they provide a guarantee to the bond's Obligee (the Department of Revenue) that they will conduct business in compliance with the conditions listed in the Kansas Statutes Annotated, Chapter 8, Article 24.

If the auto dealer fails to comply with the conditions, the surety company will pay out financial losses to damaged parties up to the full bond amount. The auto dealer is liable to reimburse the surety for any damages paid under the bond.

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How to get your auto dealer license in Kansas

To obtain your used auto dealer license in the State of Kansas, you must meet the Kansas Department of Revenue licensing requirements by completing the following steps:

  • Complete the application for dealer licensing
  • Post the $30,000 surety bond
  • Provide proof of garage liability insurance
  • Install a landline phone under the business' name
  • Install the required signage at the established place of business
  • Provide a copy of your personal property tax certification
  • Pay all application and licensing fees

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