How to Get a Dealer License in Kentucky
In Kentucky, dealer licensing runs through the Kentucky Motor Vehicle Commission (KMVC). To get a used car dealer license in Kentucky you'll need a registered business, a compliant location, a $0–$100,000 (discretionary) surety bond, and the fees below. Whether you're opening a car lot, going wholesale-only, or starting a buy-here-pay-here operation, this guide walks the Kentucky auto dealer license requirements, real costs, and the exact steps — in plain English. Rules change, so verify everything against the Kentucky Motor Vehicle Commission (KMVC)'s current pages before you file.
- Surety bond
- $0–$100,000 (discretionary)
- License term
- License fees are structured annually ($200/yr per dealer license, $40/yr per salesperson), so the license renews yearly. Confirm the exact renewal/expiration date with KMVC.
- Sales threshold
- Kentucky defines a dealer by being 'engaged in the business' of selling used vehicles (KRS 190.010) rather than a confirmed hard per-year number. The often-cited '5 vehicles a year' is unverified guidance — the operative test is the 'engaged in the business' standard.
- Pre-licensing
- None. Kentucky does not require a pre-licensing course or dealer exam — the only personal-vetting step is the $25-per-owner criminal background check.
License types in Kentucky
| License type | What it covers |
|---|---|
| Used Motor Vehicle Dealer | The core used-car license — selling at retail, displaying, or dealing in used motor vehicles to the public. |
| Wholesale Motor Vehicle Dealer | Sells to other licensed dealers only; retail sales to the general public are prohibited. |
| Motor Vehicle Auction Dealer | Offers or negotiates the sale, purchase, or exchange of vehicles through an auction. |
| Supplemental Lot | An additional lot — but KY restricts supplemental lots to new-vehicle dealers only. |
What it costs
| Item | Cost | Notes |
|---|---|---|
| Application processing fee | $175 | Mailed with the application, payable to Kentucky State Treasurer |
| Criminal background check | $25 per owner | Per owner/partner/corporate officer listed on the application |
| Dealer license fee | $200 per license type | Not due until the application is approved |
| Salesperson license fee | $40 per salesperson | All owners/partners must also be licensed as salespersons |
Step by step
- Secure a qualifying established place of business (2,000 sq ft lot, 100 sq ft office, 9-inch sign) with local zoning/building compliance.
- Obtain a Kentucky Revenue Cabinet sales-tax permit number and file any assumed-name (DBA) certificate.
- Complete Form TC 98-1, including the financial statement, personal-data/waiver forms, and color photos of the lot, office, and sign.
- Obtain garage liability insurance and be prepared to post a bond up to $100,000 if the financial statement is deemed insufficient.
- Mail the application with the $175 processing fee plus $25 per owner; it must arrive at least 10 working days before a monthly Commission meeting (second Friday).
- Upon approval, pay the $200 dealer license fee and $40 per salesperson and receive the license(s).
Premises & temp tags
Location: An 'established place of business' must be a permanent, enclosed commercial building (not residential), open to the public and code/zoning compliant (605 KAR 1:050): a display/customer-parking area of at least 2,000 sq ft, an office of at least 100 sq ft with usual furnishings, telephone and electricity, and a permanent sign readable from the road with lettering at least 9 inches high. A co-located business must be separated from the dealer's display area.
Temp tags / plates: Kentucky does not issue dealer temporary paper tags to in-state retail buyers — resident purchases are titled and registered at the county clerk with a permanent plate. Out-of-state buyers driving a KY-purchased vehicle home use a Transit Tag (Form TC 96-150TF): $5, valid 15 days, applicant cannot reside in Kentucky (KRS 186.068).
Kentucky-specific things to know
- Two-agency split: KMVC licenses the dealership, while KYTC's Division of Motor Vehicle Licensing (via the county clerk) handles titles, registration, and usage tax.
- All owners/partners must also hold a salesperson license ($40 each) on top of the dealership license.
- Approval bottleneck: KMVC only acts at its monthly meeting (second Friday), and applications must arrive at least 10 working days prior — plan for a multi-week lag.
- No standing temp tag for KY buyers — the only KY 'temp' tag is the 15-day out-of-state Transit Tag; resident buyers are registered directly at the county clerk.
Official Kentucky resources
- KMVC — Dealer Requirements ↗
- KMVC — Dealer License Application (TC 98-1 PDF) ↗
- KYTC — Division of Motor Vehicle Licensing (titles/registration) ↗
Kentucky dealer license FAQ
How much does a dealer license cost in Kentucky?+
Application processing fee: $175; Criminal background check: $25 per owner; Dealer license fee: $200 per license type; Salesperson license fee: $40 per salesperson. Plus the $0–$100,000 (discretionary) surety bond (you pay a small annual premium on that, not the full amount).
How big is the dealer bond in Kentucky?+
Kentucky requires a $0–$100,000 (discretionary) surety bond. Kentucky sets no flat bond. Applicants submit a financial statement; if it is deemed insufficient, the Commission may require a bond up to $100,000 (TC 98-1). A dealer with adequate assets may owe no bond. Statutory basis: KRS Chapter 190 / 605 KAR 1:050.
Do you need a physical lot to get a dealer license in Kentucky?+
An 'established place of business' must be a permanent, enclosed commercial building (not residential), open to the public and code/zoning compliant (605 KAR 1:050): a display/customer-parking area of at least 2,000 sq ft, an office of at least 100 sq ft with usual furnishings, telephone and electricity, and a permanent sign readable from the road with lettering at least 9 inches high. A co-located business must be separated from the dealer's display area.
How many cars can you sell in Kentucky without a dealer license?+
Kentucky defines a dealer by being 'engaged in the business' of selling used vehicles (KRS 190.010) rather than a confirmed hard per-year number. The often-cited '5 vehicles a year' is unverified guidance — the operative test is the 'engaged in the business' standard.
How long is a Kentucky dealer license valid?+
License fees are structured annually ($200/yr per dealer license, $40/yr per salesperson), so the license renews yearly. Confirm the exact renewal/expiration date with KMVC.
Is dealer training or an exam required in Kentucky?+
None. Kentucky does not require a pre-licensing course or dealer exam — the only personal-vetting step is the $25-per-owner criminal background check.
How do temporary tags work for Kentucky dealers?+
Kentucky does not issue dealer temporary paper tags to in-state retail buyers — resident purchases are titled and registered at the county clerk with a permanent plate. Out-of-state buyers driving a KY-purchased vehicle home use a Transit Tag (Form TC 96-150TF): $5, valid 15 days, applicant cannot reside in Kentucky (KRS 186.068).
Data verified 2026-07-17. Requirements change — confirm with the Kentucky Motor Vehicle Commission (KMVC) before filing.
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