The Complete Kansas Dealer License Guide (2021)
Are you considering to launch a car sales business in Kansas? If you’re on to start this exciting new endeavor, you will need to get a Kansas dealer license from state authorities. It is obligatory for anyone who wants to sell more than 5 vehicles per year in the state.
As a part of the licensing process, you have to meet a list of requirements. Their purpose is to check how well you can cope with the job of a car dealer. One of the main criteria that you have to fulfill is to post an auto dealer bond.
To get ready for the licensing procedure, you can consult the detailed guide below.
1. Determine the right auto dealer license type
The Department of Revenue is the authority in the state that oversees the activities of auto dealers and issues Kansas car dealer licenses. You can obtain a few different types of licenses that are:
- New and Used Vehicle Dealer – selling both new and used vehicles
- Used Vehicle Dealer – used vehicles only
- Salvage Vehicle Dealer – salvage vehicles
- Wholesale Vehicle Dealer – selling only wholesale to other dealers
- Auction Motor Vehicle Dealer – auction sales
2. Get to know the Kansas dealer license requirements
The Kansas Department of Revenue Dealer Licensing unit imposes the criteria that you have to satisfy in order to obtain the right to operate in the state. You have to provide the following:
- Personal information about owners
- Business entity information
- Business location requirements – separate structure with office space, business phone, sign and mail
- Pictures of the business location
- 3 credit references (for a sole proprietorship or partnership)
- Certificate of Insurance for public liability and property damage)
- Franchise Certification (for new car dealers)
- Relevant Market Area request sent to Director of Vehicles (for new car dealers)
- KDOT certificate of compliance (for salvage dealers)
- $30,000 surety bond
You can obtain further details about the licensing requirements in the Dealer Licensing and Salesperson Handbook.
3. Prepare your paperwork
In order to start your licensing process, you have to complete the Application for a Vehicle Dealer License. You also need to compile all the documents mentioned in the previous section.
Together with all of them, you must obtain the following paperwork from other institutions:
- Articles of Incorporation filed with the Secretary of State (for all business entities besides sole proprietors and partnerships)
- Sales Tax Registration Number from the Department of Revenue
- Zoning approval for your business location from local authorities
- Personal Property Tax Approval from your County Treasurer
4. Obtain the necessary Kansas auto dealer bond
To get your license, you have to post a $30,000 Kansas auto dealer bond. It is one of the indispensable requirements that you need to meet. The bond serves as an extra layer of protection for the state and for your customers, as it guarantees your legal compliance.
The bonding process entails that you cover a small fraction of the required bond amount. This is called your bond premium. It is based on factors like your personal credit score and business finances. If they are strong, you can expect rates between 0.75% and 5% of the bond amount.
Depending on your business entity type, the bond should be written as follows:
- For corporations: in the corporate name only
- For partnership: in all owners names and DBA dealership name
- For individual/sole proprietors: the bond should be written in the owner’s name and DBA dealership name
5. Apply with your full document set
You have to mail your complete application and paperwork to the Kansas dealer licensing office:
Kansas Department of Revenue
Division of Vehicles
Topeka, Kansas 66626-0001
The relevant licensing fees are:
- $75 dealer license fee
- $35 additional location fee
In addition, you have to get Kansas dealer license plates. Their cost is:
- $275.50 for the first plate
- $30.50 for each additional plate
- $350.50 for a full use plate
If your application has been approved, you will be invited to attend a dealer training class. After you complete it successfully, you will receive the license.
6. Renew your license yearly
The expiration date of your Kansas dealer license is December 31st of each year. If you want to continue your operations, you have to renew the license before that date. You will have to prolong your bond and insurance coverage, as well as pay licensing fees.
Do you need further information about getting your Kansas auto dealer license and bonding? You can speak with one of our bonding experts by calling us at 877.514.5146.
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