Dealer Licensing in Kentucky
We can't train you to be a motor vehicle dealer; however, with this section, along with our Dealer-Related Information and Dealer Forms sections, we can help you by giving you the tips and tools to get you headed in the right direction.
Types of Dealer Licenses
If you're going to make a business of selling vehicles, you'll need a dealer license.
The KY Motor Vehicle Commission (MVC) has the following licenses available for dealers:
- New (meaning franchised)
- Used (this includes wholesale)
- Restricted (specialized) vehicles
- Recycling (reusing or reselling parts)
- Supplemental lot (for instance, a lot for used cars at a dealership that mainly sells new cars)
The Kentucky Motor Vehicle Commission Dealer Handbook is an excellent place to start researching the career of a motor vehicle dealer. The MVC also provides an online document outlining dealer requirements and a special letter to applicants with application instructions.
To apply for these licenses, you'll need an Application for Motor Vehicle Dealers License Packet (Form TC 98-1). Request one by mailing a check or money order for $7 (made payable to Kentucky State Treasurer) to the MVC at:
- Motor Vehicle Commission
- 105 Sea Hero Drive
- Suite 1
- Frankfort, KY 40601
Completely fill out the application and gather all required documentation, and return it to the commission. You must submit the completed application at least 10 days before the commission meets, which is on the second Friday of each month. If you need more information you can call the Motor Vehicle Commission at (502) 573-1000.
What is Required?
Before you apply for and/or can be issued any type of dealer license, you:
- Must establish a place of business, including an office, a display lot, and customer parking.
- Must show proof of insurance, with a minimum of $250,000 property damage coverage, $250,000 per person, and $500,000 per incident; automotive recycling dealers need a commercial general liability policy in the same amounts.
- Must have a business name using the terms "used cars," "auto sales," or similar; only wholesalers can use the word "wholesale," and first-time applicants can't use "consignment" or "broker."
- All sales personnel must have obtained a salesperson's license.
- Must have a business sign showing the exact business name included on the application, with letters at least 9 inches in height installed upon submitting the application.
- Must have clear separation of display/parking lots and office facilities.
- May be required to provide a $100,000 or more bond, or show assets equaling the same amount or more.
Depending on the type of license you're applying for, you may have additional requirements:
- Wholesale dealer applicants: The same requirements must be met as listed above, with the exception of the dealer sign; a wholesaler isn't required to have a sign identifying the business.
- New or franchised dealer applicants: The same requirements must be met as listed above, but a copy of all franchise agreements must be submitted, and a vehicle service facility must be on location.
- Restricted and automotive recycling dealers: These applicants should follow the same requirements as listed above; however, if the applicant is seeking only a restricted/automotive recycling license, only a commercial general liability policy is required. The applicant must also submit a copy of salvage/recycling yard operation permit and a statement signed by the zoning official authorizing that the location is fit for this type of business.
Each dealer license is $100, and some dealers will need more than one, depending on what they plan to sell. Salesperson licenses are $20.
An application fee of $40 and a $20 background check fee for each owner is required at the time you submit your completed documents to the commission.
Once you've been approved and have received your dealer license, you can apply for dealer tags at your local Circuit Court Clerk's office and list all names of the people authorized to use the dealer tags, not including the customers. Authorized people are the dealers, licensed salespersons, and dealership employees.
Dealer plates cost $28.50.
For information regarding requirements after you've been issued a dealer license, please visit our Dealer-Related Information section.