Kentucky Dealer License

Kentucky Dealers Licenses are granted by the Kentucky Transportation Cabinet Division of Motor Vehicle Licensing in Frankfort, Kentucky.

Kentucky Dealer License Podcast

Kentucky Dealer License Application

If you want to obtain an Kentucky Dealers license all you need to do is obtain a insurance from an insurance agency, register with the Secretary of state & obtain Kentucky Sales Ta Certificate, have a building and lot, erect a sign and submit photo graphs, then submit a Kentucky Dealer License application to the Kentucky Motor Vehicle Commission , I am going to show you how to easily obtain your Kentucky dealers license

First I want to show you some valuable contact information for Kentucky Dealers, Kentucky dealers are regulated by the Kentucky Motor Vehicle Commission
Kentucky Motor Vehicle Commission
200 Mero Street 3rd Floor
Frankfort, KY 40601

I want you go in depth in the 6 Steps to an Kentucky Dealers License
Step Number 1 Dealer Surety Bond and Insurance
You may be required to obtain a dealer surety bond Kentucky dealers license. I always recommend this as the first step in obtaining a Kentucky dealers license. The cost of a dealer surety bond is based on your credit score and the cost of your insurance is based upon your driving record. I am often asked what it costs to obtain a Kentucky dealers license and I can never answer that question accurately because the total cost will depend on your credit score and your driving record.
The State of Kentucky may require you to to obtain at least $25,000 dealer surety bond in order to be granted a Kentucky dealers license, is the bond going to cost you $25,000, of course not, with good credit you should be spending about 200 to 300 dollars a year for your bond, your insurance company will normally send you an invoice every year or every other year. If you have a couple of blemishes on your credit score, the price of your bond can increase dramatically. The bond must be a surety bond eecuted by an insurance or bonding company authorized to do business in Kentucky,
When you complete your dealer application you will enter some financial information, the State of Kentucky will then determine whether or not you will need a bond.
You must also obtain a special insurance policy before the State of Kentucky will allow you to have a dealers license. Your insurance policy pricing will be dependent on your driving record so if you have a really bad driving record, you might pay a lot more for your insurance. You must also obtain an insurance policy that will cover the vehicles that are in your inventory. The State of Kentucky requires every vehicle driven on any roadway in the state to have insurance, including the vehicles in your inventory when they are being test driven by your customers.

I am sure your insurance agent will be able to eplain different types of coverage but I want to eplain some of the coverage for dealers.
Dealer Garage Liabiilty, dealer liability is just like liability on your own vehicle, if your customer wrecks on of your vehicles, the insurance will only cover the other person’s property, the insurance will not cover any damage to your demo, because it is dealer liability, I am going to recommend either when you are starting out, or shortly after you have started to obtain a larger inventory to bump up your dealer insurance coverage, you might think of it as full coverage but in our industry we refer to it as Open Lot, Open Lot dealers insurance does not cover a specific number of vehicles, it covers a dollar amount, so lets say you have $50,000 worth of inventory, YOU NEED $50,000 worth of Open Lot coverage. Kentucky has tornados, Kentucky has floods, Kentucky has halestorms. Did you see the pictures recently of the dealership that was hit by a tornado in Missouri over 700 vehicles were destroyed on one dealer lot in the course
I always recommend getting a dealer surety bond and insurance quote as your first step so you will have an idea of what the total cost outlays will be to obtain your Kentucky dealers license.
The start up costs to be granted a Kentucky Dealers license may seem epensive if you have never been in the industry, but you will soon realize the incredible mark up on vehicles, You will be amazed at the price you pay for a vehicle at a Kentucky dealer auction and what you will sell if for a week later on your Kentucky dealer lot, and you will probably with you have obtained your Kentucky dealers license 20 years ago, so GO FOR IT, I think you are going to be very glad you are getting into this industry.

One hundred thousand dollars ($100,000) for bodily injury to one (1) person.
Three hundred thousand dollars ($300,000) per accident
Fifty thousand dollars ($50,000) for property damage.
Here you see an eample of the insurance Accord form your insurance agent will provide you, you must submit a copy of your accord form with your Kentucky dealer license application, Which I will show you in just a it

Step 2-Register Business & Ta Certificate
If you are a corporation or partnership you must register with the Kentucky Secretary of States office and if you are a sole proprietor you must file your name with your county clerk. You can call the Kentucky Secretary of state at 502-564-3490. You can file your name with the secretary of state right over the phone. The trade name under which the dealership will be operated must incorporate the words “used cars,” “auto sales,” “auto mart,” “motor sales,” or other similar wording which clearly identifies the business as a motor vehicle sales business. This trade name must be the eact wording as that listed on the dealership sign and on your insurance filing. You must also obtain a Revenue Cabinet Sales Ta Permit and you can do that over the phone as well at. 502-564-3306. You must complete these easy steps BEFORE you submit your application

Step 3-Building & Lot
You must have a building for your Kentucky dealers license. Your business building must be a permanent enclosed building owned or leased by you, The established place of business must be devoted mainly to the operation of your dealership
Whether you are a retail dealer , broker, or a wholesale dealer you must meet local zoning requirements. You can contact the city hall or county court house’s planning a zoning division to ensure the location you want to use as your dealership meets all local zoning requirements for an Kentucky Dealers license. Applicants should contact their local city or county office to ensure compliance with local zoning ordinances.
The dealer shall conduct business in a building on the same property as the display lot. If the dealer is a used car broker, and will not display an inventory of vehicles for sale, the requirements of this rule for an established place of business shall still be met, with the eception of the display area for vehicles. That would be for brokers. All sales activity must take place at the lot, you cannot sell vehicles away from the lot unless you are selling vehicles at a dealer auction

New and Used Dealers are subject to the following additional requirements regarding their established place of business:
Lot at least 2,000 square feet
Have parking areas adequately surfaced with asphalt, concrete, rock, or substance that will not change with weather conditions
Have a dealer office that is:
housed at the dealer's established place of business
at least one hundred (100) square feet in size
equipped with office furniture such as a desk, chairs, and filing cabinets
reflective of functional use and operation of the license
served with utilities such as:
working telphone;
You must also have also have installed and maintain a working land line telephone whose number shall be listed in the licensee's trade name, the same as that which is listed in the application and in any advertising.
Step 4-Business Sign and Photographs
You must also erect and maintain a permanent sign. The sign shall list the trade name of the dealer, the same as that which is listed in the application and in any advertisement by the dealer. The dealership name letters must be at least 9 inches or larger.
The sign must be professionally designed on permanent material,. At least one sign must be located and positioned to be clearly visible to consumers from the street.

Step 4 Submit Application

Once again, here is that great contact information for you
Kentucky Motor Vehicle Commission
200 Mero Street 3rd Floor
Frankfort, KY 40601
When you submit your application correctly you should receive your Kentucky Dealers license in about 30 days.

Once you obtain your Kentucky dealers license you must display the license prominently, you are going to work hard to obtain your Kentucky dealers license, you are going to be proud when you obtain your Kentucky dealers license, Kentucky law requires that you display your dealers license prominently when it is granted, don’t shuve it in some desk drawer, or lock in in a vault, frame your official Kentucky dealers license and display it on the wall, all Kentucky dealers licenses must be displayed prominently

To find out how to get an Kentucky Dealer License, you can call the Kentucky Transportation Cabinet Division of Motor Vehicle Licensing at 502-573-1000 or you can write:

Kentucky Motor Vehicle Commission
105 Sea Hero Road, Suite 1
Frankfort, Kentucky 40601

Download step by step Kentucky Dealer License instructions
Download Kentucky Dealer Handbook
Download Kentucky Dealer Application Packet

Good Luck In Obtaining Your Kentucky Dealer License!

We are here to help you obtain a Dealer's License and maintain your Dealership Compliance!

Dealer License  

Delus Johnson-Lead Instructor
Automobile Dealer Training Association