State rules
Kentucky auto loan rules
Kentucky has 417 Census places covered on AutoLoanable, with a combined estimated population of 2,520,446. Vehicle financing in Kentucky is governed by state law — the interest-rate caps, title-lending rules, sales-finance licensing and the regulator that oversees them. The sourced figures below apply to every car loan made to a borrower in the state.
The lowest rates are only available to the most qualified applicants.
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Key rules for car buyers in Kentucky
| Rule | Detail | Source |
|---|---|---|
| Maximum legal interest rate (usury cap) | Up to 19% per annum, or 4% over the 90-day commercial-paper discount rate, whichever is less (by written agreement) Source says: "At a per annum rate not to exceed four percent (4%) in excess of the discount rate on ninety (90) day commercial paper ... or nineteen percent (19%), whichever is less". |
Kentucky Legislative Research Commission (Kentucky Revised Statutes) as of 2026-09-17 |
| Vehicle title loan status | Kentucky repealed its Title Pledge Lending subtitle in 2024, eliminating the title pledge lender license; car-title pledge loans are no longer an authorized licensed product in the state. Source says: "repeals Subtitles 7 and 10 of KRS Chapter 286, relating to the licensing and regulation of industrial loan corporations and title pledge lending" License category: none (title pledge lender license repealed in 2024). |
Kentucky General Assembly — Legislative Research Commission (2024 HB 726) as of 2026-09-17 |
| Sales finance / installment lender licensing | Consumer Loan Company license required (KRS Chapter 286.4) Source says: "How to License a Consumer Loan Company: 1. Read KRS 286.4 and the applicable administrative regulations under KAR 808, Chapter 6". Motor-vehicle retail installment sales are separately governed by the The Motor Vehicle Retail Installment Sales Act (KRS 190.090–190.140). |
Kentucky Department of Financial Institutions as of 2026-09-17 |
| State lending regulator | Kentucky Department of Financial Institutions (DFI) Source says: "The Department of Financial Institutions' mission is to serve Kentucky residents by promoting access to a stable financial industry, implementing effective and efficient regulatory oversight". |
Kentucky Department of Financial Institutions as of 2026-09-17 |
| Sales tax on vehicle purchases | 6% Motor Vehicle Usage Tax on vehicle purchases; no local sales taxes (state sales/use tax is also 6%). Source says: "It is levied at six percent and shall be paid on every motor vehicle used in Kentucky." |
Kentucky Department of Revenue as of 2026-09-17 |
How to use these rules
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Check the ceiling before you compare offers
If a quoted APR looks extreme, compare it against the Kentucky cap above — and note that a specific statutory exemption can apply to a particular product.
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Verify the lender is licensed
Use the regulator named in the table to confirm the lender or sales-finance company may legally serve borrowers in the state.
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Know what is secured against your car
A vehicle title loan is secured by the car itself. If the state permits it, understand the repossession terms before you sign anything.
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Budget for tax and fees separately
Sales tax and title fees are financed along with the car, so they raise the amount you borrow — and therefore the interest you pay on them.
Cities in Kentucky
We cover 417 Census places in Kentucky.