Obtain a Motor Vehicle Dealer License in Kentucky

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If you’re looking to open a car dealership in Kentucky, the first thing you need to do is obtain your Motor Vehicle Dealer License. The process for obtaining a dealer license is not difficult but there are a series of steps you’ll have to go through to submit a complete application. If you miss just one of the requirements, your application will be deemed incomplete and it will be rejected. In this article, we have broken out the required steps to help you obtain a dealership license in Kentucky. 

Please note, this article is meant to cover a general overview of the requirements for a motor vehicle dealer license. You will want to visit the Commonwealth of Kentucky Motor Vehicle Commission for a full, updated list of requirements. 

What Are The Requirements For A Car Dealership License In KY?

You Must Have Established A Place Of Business

The first step to obtaining your dealership license is acquiring a place of business. This step is generally self-explanatory. In order to open a car dealership, you’ll need to establish a physical location. This location must meet certain criteria. Requirements include things like having a large enough customer and display lot with a permanent office structure. The office must have appropriate furnishings as well as telephone and electricity. Most of this should come as no surprise, but you don’t want to apply until you’ve established your place of business. 

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Business Insurance 

Secondly, all dealerships must carry adequate liability insurance coverage in order to obtain their dealer license in Kentucky. This insurance policy should cover any damage or injury sustained by customers while they are on-site at the dealership premises or while test driving vehicles purchased from them. It should also cover any damage caused by employees while transporting vehicles on behalf of the dealership. The minimum amount required by law is $250,000 per person/$500,000 per incident/ $250,000 property damage liability insurance coverage – but many businesses choose higher limits for extra protection against potential losses due to accidents or other unforeseen events.  

Business Name

Thirdly, your dealership must have a business name. This should come as no surprise, but you do need to include words like “Used Cars” or “Auto Sales” to clearly identify you as a motor vehicle dealer. 

Licensed Sales Personnel

In addition to the business license for your dealership, you’ll need to individually license all of your salespeople. Anyone acting for a dealer in any aspect of negotiation for or displaying a vehicle for sale to the public must have a salesperson’s license.

Business Sign

This requirement likely goes hand in hand with the “Established Place of Business” requirement, however it is broken out separately so we will break it out as well. Your business must be appropriately marked with a sign. It should be positioned near the nearest road way and the lettering must be at least 9 inches in height. 

Get a Surety Bond 

Once you have completed the prior steps, you will need to get a surety bond. A surety bond is essentially an insurance policy that protects customers from fraud or unfair practices by dealerships. The state of Kentucky requires all car dealerships to carry at least $50,000 worth of surety bonds before they can be licensed to operate. To obtain a surety bond, simply contact an authorized surety or insurance broker and fill out the proper paperwork. 

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Apply for Your Dealer License 

The final step in obtaining your dealer license is filling out an application form from the Motor Vehicle Commission. This form can be found on their website and must be filled out completely and accurately before submitting it for review by MVA staff members. Once approved, you will receive your official dealer license which allows you to legally operate a used car dealership in Kentucky! 

Other Considerations When Applying For A Dealership License

We’ve covered the primary requirements for a used car dealer license in Kentucky. There are a few other licenses you may want to know about. For instance, if you are planning on opening a franchised dealership for new cars, you will need a New Motor Vehicle Dealer license. Other common dealer license types include: Motor Vehicle Leasing Dealer, Wholesale Motor Vehicle Dealer, Motor Vehicle Auction Dealer and Supplemental Lot. You’ll need to ensure you apply for each of the licenses that apply to your type of business. 

Thank you for reading our article on “How to Obtain a Dealer License in Kentucky.” We hope that this article helped you to understand the steps required for starting a new or used car dealership.