Motor Vehicle Dealer Bond in Kentucky

What this bond requires in Kentucky

Kentucky uses a discretionary bonding model rather than a single statewide amount. Under KRS 190.030 and 190.033, the Motor Vehicle Commission may require an applicant to either furnish an indemnifying surety bond or demonstrate equivalent unencumbered cash, inventory, or other reliable financial arrangements up to $100,000 (more for auction dealers). Applicants must also show at least $100,000 in liquid assets and/or $50,000 in unencumbered cash and unencumbered inventory in the business. The bond/financial showing is reviewed at initial license issuance and at renewal.

Who requires it

The motor vehicle dealer bond is required by the Kentucky Motor Vehicle Commission under KRS 190.030; KRS 190.033.

How to file in Kentucky

Applicants submit a written application packet to the Kentucky Motor Vehicle Commission in Frankfort, including a $40 application fee, $20 background-check fees per owner and salesperson, financial statements, and any required bond on the Commission-approved form. Applications must arrive at least 10 working days before the Commission second-Friday monthly meeting; the Commission then notifies the applicant of any bond or additional documentation required before a license is issued.

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FAQ

Common questions

Is a motor vehicle dealer bond required in Kentucky?

Kentucky does not set a fixed statutory bond amount for every dealer; the Motor Vehicle Commission may require a bond (or equivalent assets) of up to $100,000 based on the application, with auction dealers potentially required to post more.

How much is the bond in Kentucky?

Kentucky does not publish a single flat amount. See the state-specific notes for how it is determined.

Who requires the bond?

The bond is required by the Kentucky Motor Vehicle Commission.

How is the bond filed?

Applicants submit a written application packet to the Kentucky Motor Vehicle Commission in Frankfort, including a $40 application fee, $20 background-check fees per owner and salesperson, financial statements, and any required bond on the Commission-approved form. Applications must arrive at least 10 working days before the Commission second-Friday monthly meeting; the Commission then notifies the applicant of any bond or additional documentation required before a license is issued.

What does the bond cover?

Surety bonds protect the obligee, not the principal. If you fail to meet the obligation the bond guarantees, the surety pays the claim and recovers from you.

Is a surety bond the same as insurance?

No. Insurance protects you. A surety bond protects whoever required the bond. You repay the surety for any claim they pay.