Tennessee Dealer Bond Overview
- Purpose: To protect customers if dealers are fraudulent
- Who Needs It: Any person who sells more than 5 motor vehicles per year in Tennessee
- Regulating Body: The Tennessee Motor Vehicle Commission
- Bond Amount: $50,000 for statewide coverage
- Minimum Price: $263 for a 2-year term
What Is a Tennessee Motor Vehicle Dealer Bond?
A Tennessee vehicle dealer bond bond protects the state and clients if a dealer does any of the following prohibited acts:
- Fails to deliver a valid vehicle certificate of title
- Fails to pay a retail customer’s prepaid title, registration, or other related fees or taxes
- Breaks other license laws, rules or regulations
The Motor Vehicle Commission (MVC) requires all dealers to keep an active bond on file as long as they're licensed.
Who Needs a Motor Vehicle Dealer Bond?
Anyone that sells more than five vehicles per year needs a dealer license and surety bond. If you want to open multiple dealership locations, you’ll need a new $50,000 bond for each branch.
Other Vehicle-Related Bonds in Tennessee
If you sell cars at auctions, sell mobile homes, or have a lost title, you may need one of these other vehicle-related bonds:
- TN Motor Vehicle Auction Bond: To become a licensed auction dealer
- TN Manufactured Home Dealer Bond: To sell mobile, modular and manufactured homes
- TN Certificate of Title Bond: To register a vehicle with a missing title
How Much Do Dealer Bonds Cost in Tennessee?
The $50,000 Tennessee vehicle dealer bond premium starts at $263 for two years of coverage. Exact rates vary based on a soft credit check. Apply for your personalized rate now.
SuretyBonds.com offers the lowest available rates from our nationwide provider network with no added fees.
How Does a Tennessee Vehicle Dealer Bond Work?
By filing this bond, you agree to uphold state licensing laws, rules and regulations. If not, the surety will pay out valid claims to reimburse harmed parties for up to $50,000 in damages. Then, you must reimburse the surety provider.
How Do I Get Bonded?
You can apply for your free Tennessee auto dealer bond quote online 24/7. Provide the following information on the form on this page:
- Name and address
- Type of vehicles sold (new or used)
- Type of dealer license (new or renewal)
- Dealer license number, if available
- SSN for a soft credit preview
We’ll provide your free quote within one business day or less. You can sign and pay online at your convenience. The bond will be emailed to you shortly after checkout.
How Do I File My Bond?
You’ll sign and file the bond form with your license application packet or license renewal. The bond must expire on the same day as your license.
Can I Get Bonded With Bad Credit?
Having lower personal credit as a vehicle dealer may impact your premium rate, but it doesn’t always disqualify you from getting a bond. We work with a variety of markets to approve 99% of applicants.
How Do I Renew My Bond?
You’ll need to renew your dealer bond every two years. We’ll provide helpful reminders before your bond expires. All you need to do is pay the renewal invoices and your bond will stay active for another year.
How Do I Change My Bond Information?
If the Tennessee Motor Vehicle Commission requires you to make any changes to your bond form, email [email protected] to explain the request.
How to Get a Vehicle Dealer License in Tennessee
The Tennessee Motor Vehicle Commission (MVC) manages dealer licensing. To open a dealership, you’ll need to submit these materials:
- Dealer surety bond
- Written zoning approval
- Compiled financial statement for the business
- Copy of articles of organization or Certificate of Authority
- Certificate of Liability Insurance
- Service Agreement with an operation repair garage (if applicable)
- Copy of current Sales & Use Tax Certificate
- Financial background disclosure form (if applicable)
- Photos of the dealership, including business sign(s)
- Franchise agreement letter (franchised dealers only)
- Salesperson applications
- Copy of signed final judgment/dispositions (if applicable)
- Names of inventory financiers used by the dealership
- Payment of licensing fees
The MVC will do an onsite inspection after you apply. Once approved, you should receive your license within 14 days of the approval date.
