Whether you’re a first-time dealer or you’re a seasoned professional, the dealership licensing process can be complex and overwhelming. If you’re looking to open a dealership in Kansas, you’ve come to the right place. We’ve compiled a detailed list of everything you need for the dealership licensing process so you can get it right the first time and launch your business. 

6 Steps to Getting Your Kansas Dealer License 

1. Identify Which Dealer License You Need

In Kansas, the dealer licensing process is managed by the Department of Revenue. The department offers a few different license types according to which vehicles you plan to sell. Your first step is to choose which of the following types you will apply for¹: 

• New/used vehicles 
• Used vehicles
• Salvage vehicle dealer 
• Wholesale vehicle dealer 
• Auction motor vehicle dealer

Anyone planning to sell more than five vehicles in 12 months will be required to register for a license. 

2. Set Up a Business Location 

Before completing the application process, you will need to establish a permanent location for your business. It must be entirely separate from your home address and meet a handful of criteria. To qualify, ensure your business location²:

• Has an office to store all business records and official documents 
• Is separate from all residences 
• Includes a sign with the business name with letters at least 10 inches tall that is visible from the street 
• Adheres to all zoning laws 

You will be required to submit images of your location with your application to prove you have upheld all of the requirements. 

3. Register Your Business With the State

You must choose which type of business you are opening: a corporation, LLC, partnership, or sole proprietorship. Once you do that, you must register it with the Secretary of the State.

4. Secure Liability Insurance and an Auto Dealer Bond 

To operate a dealership in Kansas, you must get liability insurance listed in your business name and include proof with your application. The amounts required are $25,000 per person for bodily injury, $50,000 per incident, and $10,000 for property damage. 

In addition to the insurance, you also need to secure an auto dealer bond of $30,000. You won’t have to pay this full amount; rather, you will be required to pay a fraction based on your personal financial details. 

5. Gather All Other Documents

In addition to the above, you will need to submit paperwork that proves you have met all required credentials: 

• Copy of your sales tax certificate
• Tax clearance certificate
• Proof that you do not owe any personal taxes (this can be obtained from your county’s treasurer)
• Articles of incorporation for your business if you are operating a corporation or an LLC
• Franchise certification for new dealers plus a copy of the franchise sales agreement
• Market Area request for new dealers
• Certificate of Compliance for salvage dealers
• Three credit references that prove your good financial standing if you are opening a sole proprietorship or a partnership

6. Submit the Dealer Application and Fees

Once you have gathered everything, you are ready to submit your dealer license application. Kansas requires you to pay some fees with your application. They are the following³: 

• $275 for the first auto dealer tag
• $75 for the license fee
• $25.50 for each additional dealer plate
• $350 for each full-use plate
• $35 for a supplement location fee if you are opening a secondary dealer lot

Once you have all of your materials ready, you can mail them to: 

Kansas Department of Revenue
Division of Vehicles
Topeka, KS 66626

This is not intended as legal advice. If you have questions about dealer licensing requirements, please seek the assistance of legal counsel.

Trust ACV Auctions to Have the Best Used Car Inventory in Kansas 

Once you are licensed and ready to sell vehicles, work with ACV Auctions to secure used car inventory across Kansas and from other states. Our online vehicle auctioning platform showcases the best used vehicles in the country. Each one is inspected by a diligent member of our team and comes with a detailed report so you know exactly what you are bidding on. Get your business off the ground with exceptional quality vehicles. Register with us today to get started. 

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Sources

1. Lance Surety Bonds. (2023). “The Complete Kansas Dealer License Guide.” Risk Strategies: Lance Surety Bonds. Retrieved November 12, 2023. https://www.suretybonds.org/blog/kansas-dealer-license-guide 
2. JW Surety Bonds. “Kansas Auto dealer License Guide.” Risk Strategies: JW Surety Bonds. Retrieved November 12, 2023. https://www.jwsuretybonds.com/states/kansas/auto-dealer-license 
3. Bryant Surety Bonds. (2022). “Kansas Auto Dealer License Guide.” Bryant Surety Bonds. Retrieved November 12, 2023. https://www.bryantsuretybonds.com/blog/how-to-get-a-kansas-dealer-license