Interested in getting a Tennessee motor vehicle dealer license? If you’re new to business licensing, here’s a quick rundown of how the process works. Learn more below, and apply online for the bond you need today.
Tennessee Dealer License Requirements
In order to be eligible for the auto dealer license, applicants in Tennessee need to be prepared to begin doing business. They are licensed through the Tennessee Motor Vehicle Commission, and that agency has established a checklist of materials applicants need and criteria they must meet to get a license.
Motor vehicle dealer applicants must establish a permanent place of business that is at least 288 square feet with a restroom. The dealership’s lot must accommodate fifteen vehicles for display and have at least three customer parking spaces. The place of business can’t be at a private residence, and it must not share its lot with another business. Dealer licensees can operate one other business out of the same location, as long as the dealership remains the primary business.�Applicants also need a letter stating the business’s compliance with local zoning laws.
If the dealership will not have a repair facility on-site, applicants need a Service Agreement with a nearby auto repair shop. The dealership’s signs must be permanent, visible from the road, and display its full name in eight-inch letters. Applicants need to include photos of the entire business with the application.
Dealer Bond Requirements
Tennessee motor vehicle dealer applicants need a $50,000, two-year surety bond, a business tax license, and a financial statement showing a net worth of at least $10,000. Proof of liability and garage liability insurance is also a requirement. Any salespersons employed by the business need to apply through the state’s online portal.
If the dealership is a franchise, applicants pay a licensing fee of $400 per line-make they will sell; used auto dealer applicants pay $400.
What Does This Bond Do?
The Tennessee motor vehicle dealer license bond is a dealer’s promise that they will adhere to all state and federal laws regarding their business. That means they won’t misrepresent the vehicles they’re selling or commit any sort of fraud that would cost their customers money dishonestly. But, if a customer does suffer financial damages as a result of the dealer’s unlawful business practices, the $50,000 surety bond protects them and the state from financial liability. The surety company pays out on any proven claims, but the dealer must reimburse the surety for that claim amount.
This bond must have a two-year term. Dealers can’t do business without this bond! Ready to get bonded as a Tennessee auto dealer? Single Source Insurance is ready to help!�