Many insurance companies and car owners simply want to be rid of old vehicles, which can be a source for cheap parts. Because of this, many Kentucky automotive dealers also deal in salvaged vehicles, either to rebuild and sell them with a salvage title, or to sell as parts. To sell salvaged vehicles or parts in Kentucky, dealers must obtain a Restricted/Automotive Salvage license from the state Motor Vehicle Commission. Dealers who also sell used or wholesale vehicles must obtain additional endorsements on their license beyond those needed to sell salvage vehicles.
Locate a place to do business. The Kentucky Motor Vehicle Commission requires that all licensees operate from a location with at least 2,000 feet of paved parking for customers and to display cars with a permanently constructed, habitable office immediately adjacent to the lot.
Select a name for your automotive salvage operation. Your business name must involve words that clearly label it as an automotive salvage dealer.
Obtain insurance. If you plan to operate only an automotive salvage business, the state of Kentucky requires you to purchase only commercial general liability coverage. If new, wholesale or used cars are to be sold from the same lot, you must also carry a $100,000/$300,000/$50,000 garage liability policy.
Provide proof of insurance to the state Motor Vehicle Commission. It must be signed by a representative of your insurance company – not the agent who sold you the coverage – and mailed directly to the commission.
Receive a sales tax license from the Kentucky Department of Revenue and, if necessary, the municipalities in which you plan to work.
Download the application for motor vehicle license from the Kentucky Motor Vehicle Commission, and complete it with required information about location, insurance and your personal details, as well as photographs of the lot and office as required. Provide licensing fees of $100 for each type of endorsement you plan to receive. Mail the application to:
Motor Vehicle Commission 105 Sea Hero Road, Suite 1 Frankfort, KY 40601