Kentucky MVD Bond

Kentucky MVD Bond

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A Kentucky MVD bond, also known as a Motor Vehicle Dealer bond, is a type of surety bond that is required by the Kentucky Transportation Cabinet for individuals or businesses that want to obtain or renew a motor vehicle dealer license. The bond serves as a form of protection for customers against any fraudulent or unethical practices by the motor vehicle dealer. If a dealer engages in such practices, a customer may file a claim against the bond to seek compensation for any resulting damages. The bond amount required by the Kentucky MVD may vary based on the type of license and the dealer's history, and the bond must be renewed periodically to maintain the dealer's license.

What is an Kentucky Car Dealer Bond? 

Kentucky Car Dealer Bonds are required by Kentucky's MVC to obtain your Dealer license. The MVD Bond amount for the sale of New and used vehicles is set at $20,000.  The Auto Dealer bond ensures that the principal shall comply with the conditions of any contract made by such licensee in connection with the sale or exchange of any motor vehicle and shall not violate any of the provisions of law relating to the conduct of the business for which it is licensed.

The State requires a Car Dealer bond for each license you hold: 


- $20,000 New and Used Vehicle Dealer Bond          https://www.wwisinc.com/bond-types/apply/kentucky-mvd-bond

Different parts of a bond:

 There are 3 parts to a MVD surety bond. The Principal "YOU", The Surety Company, and the Obligee. The Principal is the business or individual applying for the MVD Surety Bond. The Obligee  is the individual or entity requiring the Surety Bond and the Surety Company is the company who provides the Surety Bond coverage.
Try our 100%  Secure MVD Bond Online Application to get the Lowest MVD bond rates in all 50 States.


You can buy your Kentucky Car Dealer bond (Apply) online immediately

Kentucky MVD Bond Requirements and Information:

All Dealer Licenses Require the Following:

I.            Established Place of Business (Display Lot/Customer Parking Area, Office)

        1.            An Established Place of Business is defined as a permanent, enclosed commercial building located within this state, easily accessible and open to the public at all reasonable times, and at which the business of a vehicle dealer, including the display and repair of vehicles, may be lawfully carried on in accordance with the terms of all applicable building codes, zoning and other land use regulatory ordinances.

        2.            The Commission requires an established place of business to have a display lot/customer parking area of at least 2,000 square feet.

        3.            The display lot/customer parking area must have a hard surface covering (e.g., gravel, asphalt, concrete).

        4.            The display lot/customer parking area must be constructed in such a manner that will not allow the flow of public traffic through it and must be used exclusively for the display and showing of vehicles for sale and customer parking.

        5.            The office facility must have sufficient space in which to operate a dealership. The Commission requires an office to have at least 100 square feet of floor space, as well as the usual office furnishings (desk, chairs, and file cabinets), telephone and electricity.

        6.            The office shall be underpinned and on a permanent foundation.

        7.            The office must be on or immediately adjacent to the display lot.

        8.            Because the statute defines “established place of business” as a “commercial building,” the location cannot be a residence.

II.            Insurance

A certificate of insurance must be submitted to the Commission by the applicant’s insurance company (not the agent) showing for all dealers, except automotive recycling dealers, garage liability coverage in the minimum amounts of $250,000 per person, $500,000 per occurrence and $250,000 for property damage. For automotive recycling Revised 07/20142 dealers, a commercial general liability policy showing coverage in the same amounts must be provided.

Certificate of insurance need not be on file prior to Commission approval of the application. The applicant will be notified when the certificate of insurance is required.

III.            Business Name

        1.            Your business name must incorporate the words “Used Cars,” “Auto Sales,” “Auto Mart” or other similar terms that clearly identify you as a motor vehicle dealer.

        2.            Unless you have or are applying for a license as a new motor vehicle dealer, you cannot use the name of any make of motor vehicle as a part of your trade name in the business or in any advertisement.

        3.            Unless you are applying for a wholesale license, you cannot use the word “wholesale” in the business name. Same goes for “leasing”.

        4.            Applicants cannot use the words “broker” or “consignment” in the business name.

IV.            Licensed Sales Personnel

A Motor Vehicle Salesperson license is required for every person employed by a dealer to sell motor vehicles (even if on a temporary basis), including the owners of the business and for every person employed at a vehicle auction as an auctioneer of vehicles 605 KAR 1:050 Section 5. 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. Also anyone purchasing on behalf of the dealer at auction, driving on dealer plates or doing transfer work at the Clerk’s office. A salesperson of motor vehicles shall not engage in business in this state at any location without a license issued for that location as provided in KRS 190.010 to 190.080. If you are only a restricted/automotive recycling dealer, a salesperson’s license is not required.

V.            Business Sign

Unless you are licensed or seeking a license as a wholesale dealer, you must display on your premises a permanent sign which can be seen or read from the nearest roadway, which specifically identifies the business with the business name, by lettering of at least nine inches (9”) in height. The sign must show the business name exactly as it appears on the application/assumed name certificate. The sign must be installed when application is submitted.

VI.            Separation of Facilities

If you or any other person conducts another business from the location for which the dealer license is issued or applied for, your display lot/customer parking area must be separate and apart from what is used for the other businesses. Your office need not be a separate walled enclosure, but it must be a separate defined area with the furnishings mentioned above. If there is any question about separation, the Commission may require a physical barrier to be installed between the different businesses.

VII.            Application

The application form must be completed and received back in this office by ten (10) working days before the next scheduled Commission meeting (held on the second Friday of each month). If the application is not completely filled out, it will be returned to you. A $40 application fee, plus a $20 fee for each person listed as an owner and $20 fee for each salesperson to conduct a criminal background check, must be submitted with the application. Make check payable to “Kentucky State Treasurer.”

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