Tennessee Auto Dealer Bond$50,000 TMVC Requirement

Tennessee auto dealer bonds ($50,000) typically cost $500-$5,000 per 2-year term 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 $5,000 (10%). Because Tennessee requires a 2-year bond, you pay one premium for the full term -- no annual renewal until the bond expires.

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. For example, a bond issued in 2025 expires June 30, 2027. This biennial cycle is set by the Motor Vehicle Commission and applies to all dealer types. The next expiration date is June 30, 2027.

The Tennessee Motor Vehicle Commission (TMVC), operating under the Tennessee Department of Commerce and Insurance, regulates all motor vehicle dealers. Created by the Tennessee General Assembly in 1955 under TCA Title 55, Chapter 17, the TMVC protects public health, safety, and welfare through industry regulation. The Commission meets monthly in Nashville and has enforcement authority including license suspension and revocation.

Under TCA 55-17-111, the Tennessee dealer bond protects consumers who suffer loss due to: (1) nonpayment of prepaid title, registration, or related fees and taxes, and (2) failure to deliver valid vehicle title certificates free and clear of prior owner interests and liens. The $50,000 bond is the aggregate limit per bond term. Claims are filed with the surety company listed on the bond.

No. Tennessee requires a surety bond on TMVC Form IN-1316 from a licensed bonding company. However, per TCA 55-17-111, the Commission may accept a certificate of deposit (CD) as collateral to secure the bond. Letters of credit and cash deposits are generally not accepted as standalone alternatives.

Tennessee requires permanent signage with letters at least 8 inches in height that reflects the business name as registered with the Motor Vehicle Commission. The sign must be permanently installed (not a banner, which is considered temporary) and clearly visible from the public roadway. Failure to maintain proper signage can result in citation and potential license suspension during a TMVC compliance inspection.

Anyone who sells, exchanges, or offers to sell or exchange more than 5 motor vehicles in one calendar year in Tennessee must have a dealer license. This includes cars, trucks, RVs, motorcycles, and other motor vehicles. The requirement applies to both new and used vehicles. Selling without a license is a Class A misdemeanor under TCA 55-17-114.

Tennessee dealer license fees are $400 for used vehicle dealers, $400 per line make for new vehicle dealers (e.g., a dealer with Ford and Toyota pays $800), $400 for recreational vehicle dealers, $400 for mobility dealers, and $400 for auction licenses. Each salesperson license costs $35. Re-inspection fees and name change fees are $400 each. Late renewal carries additional penalties.

Yes. Each dealership location (including branch lots) requires its own separate $50,000 surety bond and separate dealer license. If you have a main lot in Nashville and a branch in Memphis, you need two $50,000 bonds and two licenses. Each location must independently pass a facility inspection and meet all signage and zoning requirements.

Tennessee dealer licenses and bonds renew biennially (every 2 years) on June 30 of odd-numbered years. The TMVC sends renewal notices approximately 90 days before expiration. You must submit an updated bond and insurance certificate prior to approval. All Tennessee licensees can renew online through the TMVC portal. We send renewal reminders well in advance to prevent any lapse.