Kansas Auto Dealer Bond

It’s both used and new car dealers who need to provide proof of a valid auto dealer bond prior to getting licensed. However, there are a few exceptions for the following dealer types: Manufacturers, Distributors, Factory Branches, Lending Agencies, and Manufactured Home Dealers.

The bonding amount for a Kansas auto dealer bond is $30,000, meaning that in case of a valid claim against you, you may be liable for up to $30,000.

To get your bond, or to renew it, you pay only a percentage of this amount, known as the bond premium. Your bond premium largely depends on your personal credit score. There are a few optional pieces of information you can submit to the surety bond company, which can favorably impact your premium. Such factors are, for example, your resumé, as well as your personal and business financial statements.

If your credit score is good, you are subject to standard market rates of between 1% and 3% of the total bond amount.

Applicants with bad credit pose a higher risk to the surety bond underwriter. If the dealer triggers a claim, the surety is legally responsible for it too.

Sureties partially mitigate the risk of underwriting bad credit applicants by offering bonds at higher premiums, typically between 5% and 15%. Our experience shows that 99% of applicants managed to obtain their auto dealer bond despite credit issues.

If you feel like the premium you have to pay is too high, we advise you to check out some of the tips we have provided on our “What does a bond cost?” Page.

Even though your auto dealer bond is underwritten by a bonding company, you need to apply with a bonding agency to get it. Bonding agencies work with more than one surety bond company and can often find the best deal on your behalf.

Lance Surety Bonds offers a very fast and reliable way to apply online. For any assistance you may need, call us at (877) 514-5146 or read more on our “How to Get Bonded” page.

Regardless of when you surety bond was issued, it’s important to know that it expires on December 31st of each year and needs to be renewed. Failure to do so will cause your license to become invalid.

Lance Surety Bonds always make sure you keep within the deadlines, by sending reminders 30 to 90 days ahead of time. We will also send you a bond renewal quote. Once you agree to it, we will take care of the rest and make sure your bond is renewed. Talk to one of our surety experts if you wish to take steps to further reduce your renewal premium.

Getting a car dealer license in Kansas requires a few actions. Your application should be complete, not only with an active auto dealer bond, but with all other required documentation.

You must have an established place of business, an active telephone, proper zoning, as well as a Sales Tax Registration number. If you have met all requirements, you will be notified that you also need to complete mandatory dealer training classes.

For a full list of Kansas dealer license requirements, contact the Kansas Department of Revenue or consult the information provided on their website.

If you violate the terms of the surety bond agreement, you may be facing a claim. This is never a pleasant scenario, so from the start, you should take steps to minimize the damages. Try to reach an out-of-court settlement, as this will generally cost less and involve less hassle. If there is no way to avoid the claim, it’s in your best interest to document all interactions with the customer, so you have a solid defense.

To make sure you avoid claims to begin with, make sure you and your sales team are up-to-date with all state and federal laws and regulations.

Got more questions about Kansas auto dealer bonds? Call us at (877) 514-5146 or contact us via email. We will be happy to help!