Kansas Auto Dealer Bond Overview
All Kansas car dealers who sell or lease more than five vehicles per year need to obtain a Kansas car dealer license. An indispensable requirement for most dealers– except for manufacturers and distributors, factory branches, lending agencies, and manufactured home dealers– is to obtain a Kansas auto dealer bond.
The goal of this auto dealer bond is to provide a guarantee for the state of Kansas and its citizens, that your dealership will abide by the applicable rules and will not commit fraudulent actions. Think of the bond as an indicator of your business’ trustworthiness and stability.
Surety bonds work like a contractual agreement between three entities. The surety is the bond underwriter, the obligee is the Kansas Department of Revenue that demands the bond, and your dealership is the principal that needs to get bonded.
- Surety Bond Name: Kansas Auto Dealer Bond
- Surety Bond Amount: $30,000 Kansas motor vehicle dealer bond
- Obligee: Kansas Department of Revenue
- Required Expiration Date of Dealer Bond: December 31st of each year
Like all auto dealer bonds, your Kansas auto dealer bond is not protecting the interests of your business, but rather the safety and security of your clients. In case you transgress the statutes for auto dealers in Kansas, a claim can be filed against you.
Proven claims are a serious financial burden for your dealership. The surety initially reimburses the affected parties, up to the penal sum of the bond. Afterwards you must fully repay the surety, however. To prevent financial and reputational damage, you should avoid claims on your surety bond.
Kansas Auto Dealer Bond Cost
Most types of Kansas auto dealer license require that you post a $30,000 auto dealer bond, except for manufacturers and distributors, factory branches, lending agencies and manufactured home dealers. Even if this bond amount seems considerable, your surety bond cost is only a percentage of it. The percentage is called the premium.
- For applicants with credit score above 650, your premium is usually between 1% and 3% of the bond amount.
- With a credit score between 600 and 649, you can expect a premium between 2.5% and 5%.
- If you qualify for the standard bonding market, you might end up paying only $300 for your Kansas motor vehicle dealer bond.
You can consult the surety bond costs that you can expect to pay in the different credit score ranges in the table below.
|Auto Dealer Bond Cost Based on Credit Score|
|Surety Bond Name||Surety Bond Amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Kansas Motor Vehicle Dealer Bond||$30,000||$250-$500||$300-$900||$750-$1,500||$1,500-$3,000|
You can see your exact surety bond cost after completing your full bonding application. Your surety will look at your personal financial situation, as well as at your business stats. This way, the risk of getting you bonded can be assessed. With stronger financial indicators, you can expect to pay a lower bond price.
The usual factors that sureties consider are:
- Your personal credit score
- Your assets and liquidity
- Professional experience in car sales
- Business finances
Your Kansas auto dealer bond cost also depends on the surety agency that you select. Here at Bryant Surety Bonds, we work exclusively with A-rated, T-listed surety companies. This allows us to choose the best bonding program for the particular needs of each client. Thus, you get competitive bonding rates with secure backing.
For your bond price estimate, you can consult our surety bond cost calculator in the right sidebar. For an exact Kansas car dealer bond quote, apply online today or contact our surety bond experts at (866)-450-3412.
Bad Credit Program
Here at Bryant Surety Bonds, our extensive experience has shown us how difficult it can be for bad credit applicants to get bonded. Our Bad Credit Surety Bond Program is designed to solve their problem.
For Kansas auto dealers with low credit scores, tax liens, bankruptcies, or civil judgments, the expected bond premiums are between 5% and 10% of the bond amount. The slightly higher price serves to mitigate the increased risk.
The bad credit option is a great opportunity for dealers with problematic finances, to obtain the Kansas car dealer bond they need and keep their licenses.
Kansas Auto Dealer License and Renewal
The first step for obtaining your Kansas car dealer license is to complete the Kansas Department of Revenue license application. The licensing period in the state runs from December 31st of each year. The full list of requirements is available in the Dealer Licensing and Salespersons’ Handbook.
Together with your full application, you are asked to present the following documents:
- A proof of a compliant office location
- Office mailbox and phone
- Zoning certification
- Liability insurance certification
- Personal Property Tax Certification must be signed by the County Treasurer
- Articles of Incorporation
- License/plate fees payment
- $30,000 Kansas auto dealer bond
When you complete your application, the Dealer License Bureau at the Kansas Department of Revenue will review it. If you have fulfilled all the requirements, they will issue your Kansas car dealer license.
It’s highly recommend to keep copies of the original bond forms and of other license documents for future reference.
The licensing period in Kansas is one year, starting on December 31st. You need to renew your license in time in order to keep your operating rights. At the same time, you have to renew your Kansas auto dealer bond as well. Keep in mind that as your finances change from year to year, your surety bond cost will fluctuate too. That’s why it’s useful to work on improving them, so that you can pay less for your bond at the next renewal.
Get Your Kansas Auto Dealer Bond Today
Getting your Kansas car dealer bond is an easy process. You can just apply online or reach us at (866)-450-3412, for a no-strings-attached bond quote. We’re happy to answer your questions about bonding in general and your Kansas auto dealer bond application.