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How to get a used car dealer license in Kentucky

You file form TC 98-1 with the Kentucky Motor Vehicle Commission, which votes on applications at a monthly meeting. There is no blanket bond, but you must show at least $50,000 in unencumbered cash or inventory and have the lot, office and sign finished before you apply.

  • Sourced to Kentucky MVC
  • Checked October 2026
  • Free
License
Used motor vehicle dealer license
Surety bond
Only if assets are under $100,000
State fee
$175 + $25 per owner, then $200
Pre-license course
None required
Background check
$25 court record check per owner
License term
1 year, expires December 31
What the state asks for

Kentucky dealer license requirements

The figures a first-time used car dealer needs before applying to Kentucky MVC. Each row shows how well it is supported.

Surety bond
Only if assets are under $100,000Official source

No blanket bond. If you show between $50,000 and $100,000 in unencumbered cash or vehicle inventory, you must post a bond for the shortfall to $100,000. The commission may also require one if it doubts your finances.

State license fee
$175 + $25 per owner, then $200Official source

A $175 processing fee and $25 per owner for the background check go in with the application and are not refundable. After approval you pay $200 for the dealer license and $40 per salesperson license.

Pre-license education
None requiredOfficial source

The commission's requirements outline and form TC 98-1 list no pre-licensing course or exam for dealers. The commission publishes a Dealer Handbook each year and expects dealers to read it.

Background check
$25 court record check per ownerOfficial source

Each owner, partner or officer fills out a personal data form and signs a notarized waiver. The commission checks records through the Administrative Office of the Courts. The form does not ask for fingerprints.

Insurance
Garage liability 250/500/250Official source

Garage liability coverage of at least $250,000 per person, $500,000 per accident and $250,000 property damage. Your insurance company, not the agent, files the certificate after the commission approves the application.

Business location
2,000 sq ft lot, office, 9-inch signOfficial source

A commercial building (not a residence) with an office of at least 100 square feet, a hard-surfaced lot of at least 2,000 square feet used only by the dealership, and a permanent sign. An inspector visits before the meeting.

License term and renewal
1 year, expires December 31Official source

Every license expires December 31 of the calendar year it is granted for. You renew online before that date. Renewal costs $200 per dealer license and $40 per salesperson license.

Sales allowed without a license
Confirm with Kentucky MVCConfirm with the agency

Kentucky law defines a dealer as anyone engaged in the business of selling used motor vehicles and sets no number of sales. The commission's published materials do not give a threshold.

Processing time
Decided at a monthly meetingOfficial source

The commission meets the second Friday of each month. A complete application must arrive at least 10 working days before the meeting. State law calls for a decision within 30 days of a complete application.

“Official source” means the state agency’s own page, form or law. Where the state’s sources did not settle a point, the row says so instead of showing a guess.

Who issues the license

Kentucky Motor Vehicle Commission

License you apply for

Used motor vehicle dealer license

Official licensing page

Three versions of the $100,000 financial test

The regulation (605 KAR 1:030) sets a $50,000 minimum in unencumbered cash or inventory and requires a bond for any shortfall below $100,000. The TC 98-1 cover letter says the minimum cash requirement is $100,000, and its financial page describes $100,000 in liquid assets or $50,000 cash plus $50,000 inventory. The commission's outline says a bond is at least $25,000. Ask the commission which test applies to you.
Step by step

How to get a Kentucky dealer license

The order that works for a first application. Tick each step off as you finish it.

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  1. Check your finances against the $100,000 line

    Kentucky requires at least $50,000 in unencumbered cash or vehicle inventory. If you show less than $100,000, you must also post a bond for the difference. Gather a bank statement and fill in the financial statement pages completely, including every liability.

    605 KAR 1:030, sections 4 and 5

  2. Form the business and pick a compliant name

    Register the entity, get a Kentucky sales tax permit number, and file an assumed name certificate if you need one. The trade name must include words such as Auto Sales or Used Cars, and it must match the sign and the insurance filing exactly.

    TC 98-1, items 2 and 3

  3. Build out the lot, office and sign

    Buy or lease a commercial site (one year minimum, leased from the owner). Set up the 100 square foot office, the 2,000 square foot hard-surfaced lot, the business phone and the sign with 9-inch letters. Have the local zoning official sign the certification page of the application.

    Dealer Requirements, section I

  4. Complete TC 98-1 for every owner

    Each owner, partner or officer completes the personal data form, employment history and notarized waiver and supplies a recent photo. Add the six color photos of the premises and a drawing of the lot with dimensions. Print the form single-sided, because two-sided copies are returned.

    Form TC 98-1 (9/2026)

  5. File 10 working days before the meeting

    Mail the application to the commission in Frankfort with the $175 processing fee and $25 per owner for the background check, payable to Kentucky State Treasurer. Call (502) 573-1000 for the exact cutoff date. An inspector visits the site before the meeting, so it must be finished.

    $175 + $25 per owner

  6. After approval, pay license fees and file insurance

    Once the commission approves you, pay $200 for the used dealer license and $40 for each salesperson license. Every owner needs a salesperson license too. Your insurance company then sends the garage liability certificate (250/500/250) directly to the commission.

    $200 license · $40 salesperson

  7. Get dealer plates from the county clerk

    Apply for dealer plates with your county clerk once you hold the license. You file an affidavit naming the people allowed to use them. Only licensed owners, licensed salespeople on business and customers on a test drive may drive on dealer plates.

    County clerk

Practical advice

Ask the commission in writing how it will read your financial statement before you sign a lease, because its form, its outline and its regulation describe the $100,000 test differently. Then plan around the second-Friday meeting. The sign, phone and office must be finished when you file, so a missed cutoff can cost a month of rent.

Before you apply

Seven things to settle before any state application: the business, the owners, the money and the property.

Read the startup playbook
The lot and the office

Kentucky dealer location requirements

What the state checks at the business address.

  • A permanent, enclosed commercial building in Kentucky that is open to the public at reasonable times. A residence does not qualify.
  • An office of at least 100 square feet, on a permanent foundation, on or next to the lot, with desk, chairs, file cabinet, phone, computer and fax.
  • A display lot and customer parking area of at least 2,000 square feet with a hard surface (gravel, asphalt or concrete) and no through traffic.
  • A permanent sign readable from the nearest road, with letters at least 9 inches high and the exact business name. It must be up when you apply.
  • Posted business hours with a licensed salesperson on site during those hours. You cannot operate by appointment only.
  • A dedicated business phone with voicemail in the business name, and a mail receptacle at an address not shared with any other business.
  • If you lease, a lease of at least one year directly from the property owner (no subleases), plus a zoning certification signed by the local official.

Zoning comes first

A site that meets the state’s rules can still fail local zoning. Get written approval for vehicle sales from the city or county, and ask the landlord for a lease that depends on the license being issued, before you sign.
Once you are licensed

Keeping a Kentucky dealer license

Renewal and ongoing duties

Renew online before December 31 each year ($200 per dealer license, $40 per salesperson). Keep the garage liability coverage on file: if it is canceled, your right to do business stops at once. Display the dealer and salesperson licenses in the office. A move requires a new application, and any change of ownership requires a new application and new fees.

Federal rules that apply here too

  • The FTC Buyers Guide, posted on every used vehicle you offer for sale.
  • The FTC Safeguards Rule: a written plan for protecting customer financial information.
  • IRS Form 8300 when a customer pays more than $10,000 in cash.
  • A federal odometer disclosure on each transfer.
How each federal rule works
FAQ

Kentucky dealer license FAQ

The questions first-time dealers ask most.

How do I get a used car dealer license in Kentucky?

Set up a commercial location with a 100 square foot office, a 2,000 square foot hard-surfaced lot and a permanent sign. Then mail form TC 98-1 to the Kentucky Motor Vehicle Commission with the $175 processing fee and $25 per owner, at least 10 working days before its monthly meeting. After approval you pay $200 for the license, $40 per salesperson license, and your insurer files garage liability coverage.

How much is the dealer bond in Kentucky?

Kentucky has no fixed dealer bond. Under 605 KAR 1:030 you must show at least $50,000 in unencumbered cash or vehicle inventory. If you show less than $100,000, you post a bond for the difference. State law lets the commission require a bond of up to $100,000 when it has reason to doubt an applicant's finances.

How much does a Kentucky dealer license cost?

You send $175 for processing and $25 per owner for the background check with the application. Neither is refundable. After approval, the used dealer license is $200 per calendar year and each salesperson license is $40, including one for each owner. Insurance and any bond are separate costs.

Do I need a pre-licensing course in Kentucky?

No course or exam appears in the commission's requirements outline or on form TC 98-1. The commission does publish a Dealer Handbook each year and holds dealers responsible for reading it. Owners and anyone who sells for the dealership must hold a salesperson license.

Can I get a Kentucky dealer license without a car lot?

No. Every dealer license, including wholesale, requires an established place of business: a permanent commercial building with an office and a display lot and customer parking area of at least 2,000 square feet. A home address does not qualify, and you cannot operate by appointment only. A wholesale dealer is excused only from the sign.

How many cars can I sell in Kentucky without a dealer license?

Kentucky law does not give a number. KRS 190.010 treats anyone engaged in the business of selling, displaying or dealing in used motor vehicles as a dealer, and the commission's published materials do not state a yearly threshold. If you plan to sell vehicles you bought to resell, ask the Motor Vehicle Commission before you start.

Sources

Checked October 2026. This is general information, not legal, tax or insurance advice. Fees, bond amounts and forms change, and local zoning rules vary. Confirm current requirements with Kentucky MVC or your attorney before you sign a lease or pay a fee.

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