How to Get a Kansas Dealer License in 2025

If you’re planning to open a car dealership in Kansas, obtaining a Kansas dealer license is your essential first step. Issued by the Kansas Department of Revenue, this license legally authorizes individuals and businesses to sell new or used vehicles, operate auctions, or deal in salvage cars. It is mandatory for anyone engaging in more than casual or limited vehicle sales, and it ensures compliance with state laws that protect consumers and promote fair business practices. 

To get licensed, you must meet specific requirements, including securing a $50,000 surety bond, obtaining insurance, and registering your dealership. This guide walks you through the steps to launch your dealership legally, efficiently, and in full compliance with Kansas regulations. 

1. Determine and Choose Your Dealer License Type

Before applying, it’s crucial to choose the license type that aligns with your business model and vehicle inventory. Choosing the right license ensures you comply with state laws and can operate within your intended market segment. For example, new car dealers require franchise agreements with manufacturers, while salvage dealers must meet additional compliance standards. 

Kansas offers several categories tailored to different dealer activities:

• New and Used Vehicle Dealer – Sell both new and used vehicles (requires a franchise agreement with a manufacturer).
• Used Vehicle Dealer – Sell only used vehicles.
• Auction Motor Vehicle Dealer – Sell vehicles at auction.
• Salvage Vehicle Dealer – Specialize in buying and selling salvage or rebuilt vehicles.
• Wholesale Vehicle Dealer – Sell vehicles only to other licensed dealers or distributors.

The application fee for all license types is $75.

2. Meet All State Requirements

Kansas imposes rigorous standards to ensure that dealerships operate professionally and ethically. Meeting these requirements is essential not only for obtaining your dealer license but also for maintaining it in good standing. Below is a breakdown of the key requirements all applicants must fulfill:

• To start, you must establish a permanent business location that is separate from your residence. This location must include both an office and a display lot, and it must have proper zoning approval for auto sales from your local city or county zoning board.
• Your business name must match the name used in your Kansas sales tax registration. Additionally, you must install a permanent sign with your business name visible from the street, with lettering at least 10 inches high. A listed, operable phone line under the business name is also required.
• Applicants must maintain liability and inventory insurance in the business name and provide proof of coverage. A $50,000 Kansas auto dealer surety bond is also mandatory to protect the public and ensure compliance with state laws.
• You’ll need to obtain a Kansas tax clearance certificate, which confirms you are in good standing with the state’s tax obligations. Likewise, a personal property tax certification from your county treasurer is required to confirm that all personal property taxes have been paid.
• If your business is registered as an LLC or corporation, you must provide your Articles of Incorporation or Organization. Sole proprietorships and partnerships must also submit three credit references to demonstrate financial reliability.
• Your application must include photos of your business location, including the office and the signage. If you intend to sell new vehicles, a franchise agreement with a manufacturer is required. Salvage dealers must also submit a KDOT storage certificate showing compliance with storage regulations.
• Finally, all applicants must provide a valid sales tax certificate issued by the Kansas Department of Revenue.

3. Register Your Business 

Before applying for your dealer license in Kansas, you must register your business with the Kansas Secretary of State, file the necessary formation documents, and pay registration fees. This step formalizes your business entity and is necessary for tax and legal purposes.

4. Establish a Permanent Business Location

Kansas law mandates that your dealership must operate from a permanent business location that is distinct and separate from your residence. This ensures your dealership has a professional presence and complies with local regulations. Your location must include:

• A display lot large enough to showcase the vehicles you intend to sell.
• An office space to maintain records and conduct business.
• A visible, permanent sign with your business name in letters at least 10 inches high.
• A working telephone number listed under your business name.
• Proper zoning approval from your city or county zoning board authorizing vehicle sales.

5. Obtain Required Insurance Coverage

The Kansas dealer license requires dealers to carry specific insurance to protect customers and the business:

Auto liability insurance with minimum coverage of:  

• $25,000 bodily injury per person per accident
• $50,000 bodily injury per accident for two or more persons 
• $10,000 property damage per accident 
• General liability insurance covers your business operations and inventory.

Proof of insurance must be submitted to the Kansas Department of Revenue as part of your application.

6. Purchase the Kansas Auto Dealer Bond

A $50,000 surety bond is mandatory for most Kansas dealer licenses. This bond acts as a financial guarantee that you will comply with all state laws and regulations governing vehicle sales.

The bond protects consumers and the state from dealer misconduct, such as fraud or failure to pay fees. The bond premium varies based on your creditworthiness and other factors, typically ranging from 1% to 10% of the bond amount.

7. Pay All the Required Fees

Before submitting your application for the dealer license in Kansas, you need to make sure that all required fees are paid. The list of Kansas dealer license fees is on the 3rd page of the D17A application and is as follows: 

8. Complete and Submit Your Dealer License Application

Once you have gathered all required documents, insurance proof, bond, and fees, submit your application to:

Kansas Department of Revenue
Division of Vehicles
Topeka, Kansas 66626-0001

Include all licensing fees, dealer plate fees, and supporting documents. Once submitted, your application will undergo a thorough review to ensure it is complete and complies with all relevant requirements.

9. Attend Mandatory Dealer Training

Upon approval of your application, you will receive an invitation to attend a mandatory dealer training course. This training covers Kansas vehicle laws, dealer responsibilities, and compliance requirements.

Completing this course is required before your Kansas dealer license is officially issued. It ensures you understand your legal obligations and best practices for operating a dealership in Kansas.

License Renewal

Kansas dealer licenses expire annually on December 31st. To maintain your license:

• Ensure you renew your license through the Kansas Dealer Portal prior to the expiration date to avoid any lapse in authorization.
• Maintain your surety bond and insurance coverage.
• Pay all applicable renewal fees.
• Continue complying with all licensing requirements and inspections.

Failure to renew on time can result in penalties or suspension of your dealer privileges.

Frequently Asked Questions (FAQ)

How long does it take to get a Kansas dealer license?

The timeline varies but generally takes 6 to 8 weeks. This depends on how quickly you submit complete documentation, pass inspections, and complete the mandatory training course. Early preparation can speed up the process.

Who Needs a Kansas Dealer License?

Any individual or entity that sells, offers for sale, or displays more than five vehicles within a calendar year is required to obtain a Kansas dealer license. 

This applies to new and used car dealers, wholesalers, auction dealers, salvage dealers, and manufactured home dealers. 

Selling fewer than five vehicles annually typically exempts you from licensing requirements, but you must still comply with state laws regarding vehicle sales.

Business structures you can register include:

• Corporation (S or C): A separate legal entity with shareholders and a board of directors.
• Limited Liability Company (LLC): A pass-through entity offering liability protection.
• Partnership: Business owned by two or more individuals under a partnership agreement.
• Sole Proprietorship: The Simplest form, owned by one individual without liability protection.

Do I need a dealer license to sell a few cars a year?

No. If you sell five or fewer vehicles within 12 months, you are exempt from needing a dealer license. However, selling more than five vehicles requires licensing to comply with Kansas law.

Can I run my dealership from my home?

No. Kansas law requires a permanent, separate business location with a display lot, office, and proper signage. Operating from a residence is not permitted.