What is a Tennessee auto dealer bond? 

Tennessee Code Ann. § 55-17-111 requires individuals file a $50,000 surety bond before getting their auto dealer license in the state. The state's official form IN - 1316 is titled the “Motor Vehicle Dealer Bond," but it's also known as the “auto dealer surety bond.”

The bond provides financial protection if a dealer fails to deliver a valid vehicle certificate of title or fails to pay a retail customer’s prepaid title, registration, or other related fees or taxes.

If you are selling vehicles at auction in Tennessee, the state requires a separate $50,000 Tennessee Motor Vehicle Auction bond.

How much does a Tennessee auto dealer bond cost? 

Tennessee auto dealer bond costs start at $263 for the state-required 2-year term. Your exact premium will be provided after a quick application review. Your official quote will cover the full 2-year term as required by the state. Apply online now to get your free, personal auto dealer bond quote!

How do you get an auto dealer bond in Tennessee? 

You can apply for your free Tennessee auto dealer bond quote online 24/7. You must provide the following information for Motor Vehicle Commission approval.

• dealer/dealership name
• physical business address
• mailing address
• county
• type of vehicles sold (new or used)
• type of dealer license (new or renewal)
• dealer license number, if available

Once your order has been processed, your official car dealer bond documentation will be delivered by email.

How fast can I get a motor vehicle dealer bond?

Our industry-leading technology and responsive customer service team allow us to offer free quotes and deliver your official Tennessee vehicle dealer bond faster than any other surety provider. Orders placed by 4 PM CST Monday-Friday are typically processed with same-day emailed bond delivery.

Why is the Tennessee motor vehicle dealer bond required? 

By filing this bond, a licensed dealer agrees to operate their business according to Tennessee Code. If they fail to do so, the issuing surety company will pay valid claims to harmed parties up to the full $50,000 bond amount, which the bonded dealer must then reimburse. Auto dealers must maintain an active bond on file with the state as long as they're licensed to sell vehicles in the state. 

Who regulates licensing for motor vehicle dealers?

The Tennessee Department of Commerce Motor Vehicle Commission enforces licensing regulations and reviews applications for motor vehicle dealers. If you have questions about the auto dealer surety bond requirement or the status of your motor vehicle dealer license, you can contact the MVC by phone at 1 (615) 741-2711 or by email at [email protected].

Who is required to be licensed as a Tennessee motor vehicle dealer?

Anyone who sells more than 5 motor vehicles in 1 year is required to hold a Tennessee motor vehicle dealer license. If you meet this definition, you must file a $50,000 surety bond as part of your Tennessee dealer license application packet. You must maintain a separate bond for each branch location you operate. 

How do Tennessee auto dealers file your bond?

After you've purchased your $50,000 surety bond, you must submit the original paperwork with the principal owner's signature along with your application packet to the Tennessee Motor Vehicle Commission. You must maintain your active bond with the state as long as you're licensed as an auto dealer. 

How do I update or change my auto dealer bond documentation?

If the Tennessee Motor Vehicle Commission requires you to make any changes to your bond documentation, contact your surety company. If you purchased your bond from SuretyBonds.com, email [email protected] to explain the needed change.

The most common changes for this bond include:

• dealer/dealership name
• physical business address
• mailing address
• county

How do I renew my vehicle dealer bond?

You should renew your Tennessee auto dealer bond before its current 2-year term expires. Once you pay your SuretyBonds.com renewal invoice, renewal instructions will be emailed to you to keep your bond active for your next license term. 

How do I get a Tennessee dealer license?

The following documents must be submitted by motor vehicle dealer license applicants to complete their application. 

• dealer surety bond
• written approval from the local zoning/land-use authority
• compiled financial statement for the business
• copy of articles of organization or Certificate of Authority (corporation, LLC, LLP, LP, and trusts only)
• Certificate of Liability Insurance
• Service Agreement with an operation repair garage (if applicable)
• copy of current Sales & Use Tax Certificate
• completed financial background disclosure form (if applicable)
• photos of the established place of business, including the visible business sign(s)
• letter of acknowledgment from the manufacturer(s) or distributor(s) awarding the applicant with a franchise agreement (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

An onsite business location inspection will be conducted after the application and supporting documents are submitted. Dealer licenses are issued upon final review and approval of application packages. Licenses should be received no later than 14 days from the date of approval. 

What can dealers do to avoid claims against the Tennessee auto dealer bond?

To avoid claims against your bond, you must operate your business as outlined in Tennessee Code. When filing your bond, you specifically agree to deliver valid vehicle titles and pay your retail customers' fees and taxes as required by law.