Kansas City Secondhand Dealer Bond: A Comprehensive Guide
At a Glance:
- Average Cost: $100 per year or $10 per month
- Bond Amount: $2,000
- Who Needs it: All secondhand dealers operating in Kansas City, Kansas
- Purpose: To protect the public from financial harm if the secondhand dealer violates the terms of their license
- Who Regulates Secondhand Dealers in Kansas City: The Unified Government of Wyandotte County/Kansas City, Business Licensing Division
Background
Unified Government Code of Wyandotte County/Kansas City 36-195 requires all secondhand dealers operating in the city to obtain a license from the Business Licensing Division before conducting business. The Unified Government’s Board of Commissioners enacted the licensing requirement to ensure that secondhand dealers engage in ethical business practices. To provide financial security for the enforcement of the licensing law, secondhand dealers must purchase and maintain a $2,000 surety bond to be eligible for licensure.
What is the Purpose of the Kansas City Secondhand Dealer Bond?
Kansas City requires secondhand dealers to purchase a surety bond as part of the application process to obtain a secondhand dealer license. The bond ensures that the public will be protected from financial harm if the dealer fails to comply with the regulations set forth in the Unified Government Code 36-197. Specifically, the bond protects the public in the event the dealer engages in any acts of fraud or breaches consumer contracts. In short, the bond is a type of insurance that protects the public if the secondhand dealer violates the terms of their license.
How Can an Insurance Agent Obtain a Kansas City Secondhand Dealer Surety Bond?
BondExchange makes obtaining a Kansas City Secondhand Dealer surety bond easy. Simply login to your account and use our keyword search to find the “Secondhand Dealer” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.
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Is a Credit Check Required for the Kansas City Secondhand Dealer Bond?
No, a credit check is not required for the Kansas City Secondhand Dealer bond. Because the bond is considered relatively low risk, the same low rate is offered to all secondhand dealers in the city regardless of their credit history.
How Much Does the Kansas City Secondhand Dealer Bond Cost?
The Kansas City Secondhand Dealer bond costs just $100 per year or $10 per month.
Who is Required to Purchase the Bond?
Kansas City requires secondhand dealers to purchase a surety bond as a prerequisite to obtaining a secondhand dealer license. To paraphrase Kansas Statute 50-619, a secondhand dealer, also known as a junk dealer, is a person who purchases or collects personal property of any type from a person who is not a wholesaler, for the purpose of reselling or exchanging the property.
Exemptions to this definition include:
- Antique dealers
- Automotive salvage dealers
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
How Do Secondhand Dealers Apply for a License in Kansas City?
Secondhand dealers in Kansas City must navigate several steps to secure a secondhand dealer license. Below are the general guidelines, but applicants should refer to the Business Licensing Division’s website for details on the process.
License Period – All Kansas City Secondhand Dealer Licenses are valid for one year from the date of issuance and must be renewed before the expiration date.
Step 1 – Submit an Occupation Tax Application
All businesses operating in Kansas City must register and file an occupation tax application with the Business Licensing Division, and dealers must complete this step prior to applying for a secondhand dealer license.
Step 2 – Contact the Business Licensing Division
To obtain a secondhand dealer license, secondhand dealers must contact the Business Licensing Division. The division will walk them through the application process, provide them with all required forms, and answer any questions they may have. Secondhand dealers must pay an application fee determined by the department, and all applicants are subject to a background check.
Step 3 – Purchase a Surety Bond
Secondhand dealers operating in Kansas City are required to purchase and maintain a $2,000 surety bond.
How do Kansas City Secondhand Dealers Renew Their Licenses?
Secondhand dealers should contact the city’s Business Licensing Division to obtain a renewal application before their license expires. All Kansas City Secondhand Dealer Licenses are valid for one year from the date of issuance and must be renewed before the expiration date.
What are the Insurance Requirements for Kansas City Secondhand Dealers?
Kansas City does not require secondhand dealers to purchase any form of liability insurance. Secondhand dealers must purchase and maintain a $2,000 surety bond.
How Do Kansas City Secondhand Dealers File Their Bonds?
Secondhand dealers should submit their completed bond forms, including the power of attorney, to the Business Licensing Division at the following address:
Neighborhood Resource Center
Unified Government of Wyandotte County/Kansas City, Kansas
4953 State Avenue
Kansas City, Kansas 66102
The surety bond requires signatures from both the surety company that issues the bond and from the dealer. The surety company should include the following information on the bond form:
- Legal name, city, county, and state of the entity/individual(s) buying the bond
- Surety company’s name
- Date the bond goes into effect and expires
- Date the bond is signed
What Can Kansas City Secondhand Dealers do to Avoid Claims Made Against Their Bonds?
To avoid claims against their bonds, secondhand dealers in Kansas City must ensure that they:
- Do not engage in any acts of fraud
- Do not breach contracts made with consumers
What Other Insurance Products Can Agents Offer Secondhand Dealers in Kansas City?
Kansas City does not require secondhand dealers to purchase liability insurance. However, most reputable businesses will purchase this insurance anyway. Bonds are our only business at BondExchange, so we do not issue any other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.
How Can Insurance Agents Prospect for Kansas City Secondhand Dealer Customers?
Kansas City unfortunately does not provide a public database of active secondhand dealers in the city. We suggest contacting the city’s Business Licensing Division for this information. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.