Tennessee Auto Dealer Bond$50,000 MVC Requirement

Tennessee auto dealer bonds ($50,000) typically cost $500-$5,000 annually based on credit. Excellent credit (750+) pays $500-$1,000 (1-2%). Good credit (680-749) costs $1,000-$2,000 (2-4%). Fair credit (620-679) ranges $2,000-$3,500 (4-7%). Lower credit scores may pay up to 10%.

Tennessee dealer bonds have a 2-year term. The bond must begin in the month of expected license issuance and expire on June 30th of the next odd-numbered calendar year. This is unique compared to most states that require annual bonds.

The Tennessee Motor Vehicle Commission, part of the Tennessee Department of Commerce, regulates all motor vehicle dealers. They were created by the Tennessee General Assembly in 1955 to protect public health, safety, and welfare through industry regulation.

Tennessee requires permanent signage with letters at least 8 inches in height that reflects the business name. Signs must be permanently installed and clearly visible from the road. Banners are considered temporary and do not satisfy this requirement.

Anyone who sells more than 5 motor vehicles in one year in Tennessee needs a dealer license. This includes new/used cars, RVs, motorcycles, and other automobiles. Each branch location requires a separate $50,000 bond.

The Tennessee bond protects consumers who suffer loss due to nonpayment of prepaid title, registration, or related fees/taxes, and failure to deliver valid vehicle title certificates free and clear of prior owner interests and liens.

No, Tennessee specifically requires a surety bond. A letter of credit is NOT acceptable as evidence of the required surety bond. The bond must be issued by a licensed bonding company on the form provided by the Commission.

Tennessee dealer license fees are $400 for used vehicle dealers, $400 per line make for new vehicle dealers, $400 for mobility dealers, and $35 for each salesperson license. Re-inspection and name change fees are also $400.

All Tennessee licensees can renew online. You must submit an updated bond and insurance prior to approval. The bond and license renewal should be completed before expiration to avoid any lapse in your ability to operate.