How to get a dealer license in Kentucky

KRS 190.030(1) bars new, used, auction, leasing, restricted, nonprofit, motorcycle and new recreational vehicle dealers, brokers, wholesalers, automotive recycling dealers and salespeople from doing business in Kentucky at any location without a license for that location. A motor vehicle dealer is anyone in the business of selling, offering to sell, soliciting or advertising new or used vehicles, or holding vehicles for resale, whether as a main business or on the side (KRS 190.010(21)). A used motor vehicle dealer is anyone in the business of selling at retail, displaying, offering for sale or dealing in used vehicles (KRS 190.010(36)). Court-appointed officers, regulated lenders disposing of repossessions and public officers are excluded. Kentucky law sets no number of sales that triggers the license.

• New motor vehicle dealer: Dealers with a franchise or sales and service agreement with a manufacturer or distributor. They submit copies of their franchise agreements.
• Used motor vehicle dealer: Anyone in the business of selling at retail, displaying, offering for sale or dealing in used vehicles.
• Motor vehicle leasing dealer: Businesses that lease vehicles at a periodic rate for at least a monthly term.
• Supplemental lot: New vehicle dealers only, to sell used inventory from a lot that is not next to the main office.
• Wholesale motor vehicle dealer: Dealers who sell only to other licensed dealers. Retail sales are prohibited, and no dealership sign is required.
• Motor vehicle auction dealer: Businesses mainly engaged in selling, buying or exchanging vehicles through auction. The Commission may set a bond for them.
• Automotive mobility vehicle dealer: Dealers of new or used vehicles designed or permanently modified for aging or disabled people.
• Restricted dealer/mobility dealer: Dealers who sell only specialized vehicles such as funeral coaches and emergency vehicles. The MVC page says they need $100,000 net worth and $1,000,000 in garage liability coverage.
• Restricted/automotive recycling dealer: Businesses that dismantle, salvage or recycle salvage vehicles to harvest parts. A dealer that also sells road-worthy vehicles needs a used or wholesale license too.
• Motorcycle dealer: Dealers who sell only motorcycles.
• Recreational camper dealer: Dealers of travel trailers, fifth wheel trailers, pop-up campers and drivable RVs.
• Nonprofit motor vehicle dealer: 501(c)(3) organizations that sell vehicles to clients referred by social service agencies. The place of business rules do not apply to them.
• Motor vehicle salesperson: Anyone employed by a dealer to sell vehicles, or as an auctioneer for an auction dealer. All owners and partners of a dealership must also be licensed as salespersons. The dealer pays $40 for each salesperson license.

Surety bond. Kentucky has no fixed dealer bond, and $100,000 is the statutory maximum. KRS 190.030(10) lets the Commission require a bond of up to $100,000 when it doubts an applicant's financial responsibility or compliance, or accept proof of equal financial arrangements instead. Under 605 KAR 1:030, new, used, motorcycle, automotive mobility and leasing applicants must show at least $50,000 in unencumbered cash or inventory. Those with $50,000 to $100,000 get a license only with a commercial bond for the difference up to $100,000. Form TC 98-1 (9/2026) asks for $100,000 in liquid assets, or $50,000 unencumbered cash plus $50,000 unencumbered vehicle inventory. The MVC page says auction dealers may need a bond set by the Commission.

Insurance. KRS 190.033 requires an approved bond or insurance policy on file with coverage of $250,000 for bodily injury or death of one person, $500,000 per accident and $250,000 for property damage, with 15 days' notice before cancellation. 605 KAR 1:030 requires a garage liability insurance certificate in the exact license name. Form TC 98-1 says insurance is not needed before the application is approved. The MVC page says restricted/mobility dealers need $1,000,000 in garage liability coverage.

Place of business. An established place of business is a permanent, enclosed commercial building in Kentucky, open to the public at all reasonable times, where vehicles may lawfully be displayed and repaired (KRS 190.010(10)). Under 605 KAR 1:035, the office must be on a permanent foundation, have electricity, record storage, a business phone used only for vehicle sales, a desk and chairs, at least 100 square feet, sit on or next to the lot, not be part of a residence and have its own street address. The display lot must have a hard surface such as gravel, asphalt or concrete, be at least 2,000 square feet, be used only for vehicle display and customer parking, and be clearly set apart. A sign with letters at least 9 inches high must be visible from the nearest road, except for wholesale dealers. Form TC 98-1 adds that hours must be posted with a licensed salesperson present, you cannot operate by appointment only, the address cannot be shared with another business, and a lease must run at least one year.

Background check. Each owner, partner and corporate officer completes a personal data form and signs a notarized waiver letting the Commission run a background check through the Administrative Office of the Courts, at $25 per person (Form TC 98-1). The form asks about any criminal charges or convictions and any dealer license denials, suspensions, revocations or fines, and requires a photo and five years of employment history.

Pre-license education. Kentucky does not require a pre-license course for this license.

1. Register the business and any assumed name with the Secretary of State or county clerk, and get a Kentucky sales tax permit number.
2. Buy or lease, for at least one year, a permanent commercial building with an office of at least 100 square feet, a hard-surface lot of at least 2,000 square feet and a sign with 9-inch letters.
3. Show at least $100,000 in liquid assets, or $50,000 in unencumbered cash plus $50,000 in unencumbered inventory, or plan to post a bond for any shortfall.
4. Complete Form TC 98-1 with the financial statement, six color photos, a drawing of the premises, and a personal data form, photo, employment history and notarized waiver for each owner or officer.
5. Mail it to the Motor Vehicle Commission with the $175 processing fee and $25 per owner for background checks, at least 10 working days before the monthly Commission meeting.
6. After approval, pay $200 for each license type and $40 for each salesperson license, and file your garage liability insurance certificate.

Official forms:

• Application for Motor Vehicle Dealer License (9/2026), TC 98-1
• Dealer License Renewal Application (online)

Usually not. 605 KAR 1:035 requires a hard-surface display lot of at least 2,000 square feet next to an office of at least 100 square feet in a permanent, enclosed commercial building. KRS 190.035(1)(c) allows the lot requirement to be waived if the dealer has enough space inside a building to show and display the vehicles, with a sign visible from the street. Wholesale dealers still need an established place of business but not a sign. Nonprofit motor vehicle dealers are exempt from the facility rules.

Kentucky licenses motor vehicle auction dealers, but the statutes and rules reviewed do not say who may buy at auctions. Form TC 98-1 says a wholesale dealer sells only to other licensed dealers. AuctionACCESS, which credentials buyers at over 400 auction marketplaces in North America, limits membership to licensed vehicle dealers and their authorized representatives.

All licenses expire December 31 of the year they are issued (KRS 190.030(6)). Renew with the Dealer License Renewal Application on the Commission's website (mvc.ky.gov/Pages/Online-Renewal.aspx) and pay the same fee as the license type. A license with unpaid fines, or with a change of location or ownership the Commission has not approved, cannot be renewed and needs a new TC 98-1 (605 KAR 1:215).

This is general information, not legal advice. Rules and fees change, so confirm the details with the Kentucky Motor Vehicle Commission before you apply. Last verified October 20, 2026.

Planning the business side too? Read how to start a car dealership. Used cars you offer for sale need an FTC Buyers Guide in the window. Selling your own car instead? See how to sell a car in Kentucky.