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Tennessee RV dealers have been required to get a license and a surety bond since July 1, 2017. SB 1980 was passed in April 2016, leading to changes for RV dealers in 2017. Here’s a quick guide to the new regulations.
How do I get a Tennessee RV dealer license?
Tennessee RV dealers are licensed through the state Motor Vehicle Commission; before SB 1980’s passage they were not licensed separately from other vehicle dealers. Recreational vehicle dealers are engaged in the sale, offer to sell, advertisement and solicitation to sell, and possession of RVs for sale as their primary business.
SB 1980 requires a license of RV dealers, manufacturers, factory representatives, and salespersons.�Tennessee RV dealers need separate licenses for each location where business is conducted. They can hire only licensed RV salespersons. Applicants must send their information to the Motor Vehicle Commission, including the following:
- Applicant’s name, residential address, and trade name, if applicable
- If applicant is a partnership or corporation, the names and addresses of all directors, partners, and owners of more than 5% of shares, plus the name of the partnership or corporation
- Names of inventory financers including floor planners used by dealership
- Complete description, including addresses, of any proposed places of business
- Any fees set by the Commission (75% refundable if license application is denied)
- $50,000 surety bond
If an RV dealer renews their license after its expiration, the Commission can assess a 50% application fee penalty in addition to the license renewal fee. Licenses must be renewed every other year, and renewal applications will not be accepted 90 days after the license expires.
What does the RV dealer surety bond do?
The $50,000 Tennessee RV dealer’s surety bond is similar to the bond required for motor vehicle dealers. The bond is the dealer’s promise that they will follow all the laws set forth in SB 1980, and any other applicable rules. Circumstances under which a customer could file a claim against the bond include the following:
- RV dealer’s nonpayment of prepaid title, registration, or other fees or taxes
- RV dealer’s failure to provide a title free of previous owners’ interests and liens
The bond protects customers in case the RV dealer does not conduct business in accordance with law. The bond must remain in effect for the term of the dealer’s license, and it can be canceled with 60 days’ notice to the Commission.
How much does this bond cost?
The surety bond provides $50,000 of coverage to consumers, and principals (bondholders) typically pay anywhere from 1-10% of the bond’s full amount. In this case, Tennessee RV dealer applicants can expect to pay $500-$5,000 for their surety bond.
Applicants with a good credit history should expect to pay a smaller percentage of the bond amount, and Single Source Insurance can work with clients whose credit isn’t perfect. Ready to get a Tennessee RV dealer surety bond? Start here today!