Kansas Motor Vehicle Dealer Surety Bond
A Kansas motor vehicle dealer surety bond is a required license bond for any person or business engaged in the buying, selling, or negotiating the sale of motor vehicles within the State of Kansas. The Kansas Department of Revenue (DOR), Division of Vehicles, Dealer Licensing Bureau requires all dealer license applicants to post a $50,000 surety bond. The bond amount was increased from $30,000 to $50,000 effective January 1, 2022. Surety One, Inc. offers quick, no-hassle underwriting for Kansas motor vehicle dealer bonds.
Bond Amount & Requirements
Kansas Revised Statutes KSA 8-2404 (Kansas Statutes Annotated, Chapter 8, Article 24) requires all vehicle dealer license applicants to file a surety bond. The bond is bound to the State of Kansas and severally to any person who conducts business with the dealer. It exists as indemnity for any loss sustained by a retail or wholesale buyer or seller of a vehicle by reason of any act by the licensee constituting grounds for suspension or revocation of the license.
| Bond Amount | License Type | Description |
|---|---|---|
| $50,000 | New Motor Vehicle Dealer | Sells new and used motor vehicles under manufacturer franchise |
| $50,000 | Used Motor Vehicle Dealer | Sells used motor vehicles to the public |
| $50,000 | Wholesale Motor Vehicle Dealer | Sells motor vehicles to other licensed dealers |
| $50,000 | Auction Motor Vehicle Dealer | Conducts motor vehicle auction sales |
| Exempt | Manufacturers / Factory Branches | First and second stage manufacturers, factory reps exempt from bond |
Important — Bond Increased in 2022: Effective January 1, 2022, the Kansas DOR increased the dealer bond requirement from $30,000 to $50,000. All active dealers must maintain the $50,000 bond. Kansas also offers alternatives to the surety bond: cash, certificates of deposit, U.S. government bonds, or State of Kansas bonds of equal amount may be posted in lieu of a surety bond. However, surety bonds are generally preferred because the surety investigates claims for merit before paying, providing an additional layer of due process not available with cash alternatives.
Who Needs This Bond?
Kansas defines a vehicle dealer as any person who purchases a vehicle with the intent to sell it for a profit, or who sells five (5) or more vehicles within a calendar year. The bond applies to all dealer license types:
- New (franchise) motor vehicle dealers
- Used motor vehicle dealers
- Wholesale motor vehicle dealers
- Auction motor vehicle dealers
Exempt from bond: First or second stage manufacturers, factory branches, factory representatives, salespersons, and lending agencies. These parties may have separate licensing requirements.
How Much Does the Bond Cost?
The cost is a small percentage of the $50,000 bond amount, determined by credit, financials, and experience. Surety One, Inc. offers competitive rates for all credit profiles. Quoting is free of charge with no obligation to purchase.
Kansas Dealer License Requirements
- Completed dealer license application with applicable fees
- $50,000 surety bond (Form D-30) approved by DOR Legal Department
- A permanent business location with a name matching the sales tax registration number
- Business phone listed under the business name
- Business sign with the dealership name displayed
- Zoning certification from county or city zoning office
- Public liability and property damage insurance
- Sales tax registration number
- Foreign corporation papers (if incorporated outside Kansas)
Filing, Renewal & Cancellation
The original signed bond form must be mailed to the Dealer Licensing Bureau. The bond must be approved by the Kansas Department of Revenue Legal Department before it is accepted — bond forms returned for corrections require a completely new bond (riders are not accepted for bonds not previously approved). The bond is continuous in form and remains in force until canceled. The surety may cancel by giving 30 days’ written notice to the principal and the DOR. Premium is payable annually.
Bond Claims
Kansas has a unique claims process. Under KSA 8-2404, the Director of the Division of Vehicles determines whether a final judgment from a Kansas court of competent jurisdiction resulted from an act in violation of the licensing statutes. Upon that determination, bond proceeds are paid. This director determination is specifically exempted from the Kansas Administrative Procedure Act and the Kansas Judicial Review Act. If a surety wrongfully fails or refuses to pay after the director’s determination, the court shall award reasonable attorney fees to the judgment creditor.
Kansas Department of Revenue
Division of Vehicles — Dealer Licensing Bureau
P.O. Box 2369
Topeka, KS 66601-2369
Phone: (785) 296-3621
Email: kdor_tr@ks.gov
Web: ksrevenue.gov
Surety One, Inc. is the Kansas surety bond expert provider, licensed in all fifty states, U.S. territories, and Canada. We offer competitive rates for Kansas motor vehicle dealer bonds and all other license bond classes. Call us at (800) 373-2804, email Underwriting@SuretyOne.com, or chat with a live underwriter for immediate assistance.
Surety bond application review and quoting are free of charge. There is no obligation to purchase.
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Obligee's Bond Form
