Kansas Motor Vehicle / Auto Dealer Bond Cost

While $50,000 might seem like a large amount to pay, in reality, you only need to pay a percentage of it to get bonded, which is called the bond annual premium. The surety company will look at several factors to determine your Kansas motor vehicle dealer bond cost, most importantly, your credit score. Factors such as years licensed and years of industry experience will also play a factor in your dealer bond cost.

• If your credit score is above 650, you’ll likely have to pay between .75% and 2% of the bond amount.

• For applicants with credit scores between 600 and 649, the rates range between 2.5% and 4%.

Kansas Motor Vehicle / Auto Dealer License and Renewal

Who Needs a Kansas Motor Vehicle Dealer Bond?

You must be licensed & bonded if you:

• Buy vehicles with the intent to resell them for profit

• Sell five (5) or more vehicles in a calendar year

• Operate as a manufactured home dealer or vehicle salesperson

Once licensed, all transactions (including temporary tags and registration) are handled through the Kansas Dealer Portal via the KDOR Customer Service Center.

🔗 Create an Account with the Kansas Dealer Portal

What Is a Kansas Auto Dealer Bond?

To get licensed, you are required to post a auto dealer surety bond. This bond protects consumers against fraud or failure to follow Kansas dealer laws.

Kansas Dealer License Requirements

To qualify for a Kansas motor vehicle dealer license, you must meet the following basic requirements:

• ✅ Established place of business (zoned for vehicle sales)

• ✅ Business name must match your Kansas sales tax registration

• ✅ Kansas Tax Clearance Certificate
  ➤ Apply for tax clearance here

• ✅ Operating telephone line

• ✅ Permanent sign displaying the business name

• ✅ Verification from your County Treasurer that you owe no personal property taxes

• ✅ Three (3) credit references

• ✅ Articles of Incorporation (for corporate entities)

• ✅ Business insurance and inventory insurance

• ✅ Kansas Motor Vehicle Dealer Bond (required)

• ✅ Garage Liability Insurance (highly recommended)

Recommended Garage Liability Insurance Coverage for Kansas Auto Dealers

In addition to the required $50,000 Kansas Motor Vehicle Dealer Bond, all licensed dealers in Kansas—whether retail, wholesale, or powersports—should carry Garage Liability Insurance to protect their business operations. While not always required for licensing, this coverage is highly recommended and often requested by lenders, floorplan companies, landlords, and customers.

Here’s what your garage liability policy should ideally include:

1. Garage Liability Coverage (General Liability + Auto Liability)

Garage Liability Insurance is a hybrid policy that combines aspects of a commercial auto policy and general liability insurance to cover:

• Bodily injury and property damage arising from your business operations

• Test drives, customer vehicles, and vehicles in your care, custody, or control

• Slips and falls on your lot

• Legal defense costs

Recommended Limits:

• $100,000 / $300,000 / $100,000 or higher

• Many lenders and floorplan providers require $1 million liability limits

2. Garagekeepers Insurance

Protects your customers’ vehicles while they are on your premises for:

• Repairs

• Storage

• Test drives
  This is especially important if you operate a repair shop, detail vehicles, or accept customer trade-ins.

Coverage Types:

• Legal Liability (only covers damage if you're found negligent)

• Direct Primary (covers damage regardless of fault — highly recommended)

3. Dealer's Physical Damage / Open Lot

Covers damage to your inventory from:

• Collisions

• Theft

• Vandalism

• Weather events (hail, wind, flood, etc.)

Make sure your inventory value is accurately reported to ensure full protection.

4. False Pretense Coverage

Covers losses when a vehicle is voluntarily turned over to someone under fraudulent pretenses (e.g., bad checks or identity fraud). This is essential for wholesale and retail dealers who sell to unknown buyers.

5. Errors & Omissions (E&O)

Provides coverage for clerical mistakes, title processing errors, or compliance violations. E&O is especially valuable if your dealership handles in-house financing or lien work.

6. Cyber Liability (Optional)

Recommended if you collect customer data (SSNs, driver’s license info, or credit applications). This covers:

• Data breaches

• Ransomware attacks

• Identity theft liability

Need Help with Garage Liability Insurance?

At All American Bonds and Insurance, we specialize in insuring licensed auto and powersports dealers in Kansas. Whether you're starting your first dealership or expanding operations, we’ll help you choose the right protection at a competitive rate.

✅ Fast quotes
✅ Low down payments
✅ Coverage that meets dealer board and lender requirements

📞 Call us at (844) 321-2663 or Get a Quote Now!