The Commonwealth of Kentucky Motor Vehicle Commission may require a motor vehicle dealer to obtain a surety bond to get a license. Dealers need to show they have financial stability during license application. If the Commission deems there are not enough assets or other securities present, a surety bond from a third-party surety company will be required.
With Jet Insurance Company, you can get your quote online and save on your bond now!
The most important factor that affects the bond’s price is the required bond limit set by the Commission. The bond limit will range from $25,000 to $100,000. The premium (what you pay) for the bond is just a percentage of that bond amount and is based on the personal credit and experience of the applicant.
With Jet, the lowest rate available is $17 a month or $170 for a one-year term for bonds with the $25,000 limit. Applicants without good credit and/or less experience can expect to pay more. Below is a chart showing preferred tier pricing available for a couple of different bond limits.
|Bond Limit||Monthly||1 Year||2 Years|
The monthly option is exclusive to Jet within the surety industry. It allows dealers to purchase the bond for a low monthly cost and cancel at any time. This is a big advantage for dealers who can eventually get the bond requirement waived by the Commission.
The Kentucky Motor Vehicle Commission has a duty set in place by the State Legislature (Kentucky Revised Statutes Chapter 186) to protect consumers from damages caused by dealers. The surety bond is a financial safeguard that gives the public recourse in the event a dealer neglects or purposely fails to perform their duties, such as transferring the title, or acts fraudulently, like tampering with odometers.
When a consumer suffers financial harm, the dealer must make restitution. Typically, this is ordered by a court or regulatory agency in Kentucky. The Commission believes that if a dealer has a certain level of financial stability they are less likely to cause a complaint or could resolve a complaint on their own amicably with their own resources.
The Commission will look at cash, inventory, real estate, etc. upon application for a license to determine if the minimum level of assets is met. If the minimum level is not met, the Commission will require a surety bond at a bond limit they determine appropriate for the dealer to operate.
The Kentucky Auto Dealer Bond is a guarantee through a third-party financial institution (Jet) that the surety will step in and make payment should the dealer fail to make amends for damages they negligently or willfully cause.
Active dealers can have the surety bond requirement waived upon request to the Commission. The Commission will, of course, require the dealership to prove they have the proper level of assets to assuage the financial asset requirement and do away with the bond.
The following license types can be required to hold a surety bond:
It only takes about two minutes to get your quote online and about another one minute to purchase it. You can also call (855) 296-2663 and get a quote over the phone. We have to run a credit check as part of our underwriting process—it will not affect your credit and only takes a second.
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Yes, Jet can file the bond to the Commission for you. We will send you the original bond, regardless, to the address you provide during purchase. Should you want to submit the bond physically, the Commission is found at the address below:
Commonwealth of Kentucky Motor Vehicle Commission
150 Sea Hero Rd. Suite 1
Frankfort, KY 40601