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Tennessee Auto Dealer Bond

The auto dealer surety bond is also known as a motor vehicle dealer bond. An auto dealer surety bond is required by the State Motor Vehicle Department to obtain a dealership license in the state in which your dealership is located.

The auto dealer bond does not protect the used car dealer from lawsuits, but it protects the consumer from fraud or misrepresentation by the car dealer.  Auto Dealer Bond guarantee compliance with state laws and every state sets its own bond amount, period and expiration date.

Steps To Get Your Dealer License;

First Obtain Auto Dealer Bond.

The bond cost varies depending on your financial strength, e.g. personal credit.

  • To obtain a free bond quote for your auto dealer license. It takes less than 3  minutes and you will be able to lock your rate for the next 90 days.
  • You are required to have a two-year surety bond which is signed by the owner or all owners or partners.

Bond Amount Required: $50,000 for 2 years and expire by the end of the month, Rates Start from $275/2 years based on excellent credit history.

Apply Online For Faster Approval

Second You Must Have a Permanent Business Location

All auto dealers are required to have a permanent facility that meets the following requirements:

  • Used exclusively for the motor vehicle dealership
  • Physically separate from other business operations and does not include a private residence
  • A minimum area of 288 square feet and include a restroom
  • A landline phone number posted on a window or sign and listed in the directory
  • Open at least three days a week for a minimum 12 hours in total, with at least eight of these hours between Monday-Friday
  • A lot accommodating 15 motor vehicles of the dealership’s product line, with an additional three spaces for customer parking
  • A permanent sign with the name of the dealership in letters larger than 8 inches

Applicants are required to send pictures that show the entire display lot, sign, hours of operation, posted landline phone, office, restrooms, and all exits and entrances.

Find Out What Type of License You Need:

  • Franchise Vehicle Dealer – includes right to sell used cars and trucks at the same location
  • Used Vehicle Dealer – includes right to sell used cars
  • Franchise Motorcycle Dealer – includes right to sell used motorcycles at same location)

Third Submit Your Dealer License Application

Submit your completed application form to the Division of Regulatory Boards, together with your bond and other required documentation.


  • Motor Vehicle Franchise Dealer: $400.00 per line make
  • Used Motor Vehicle Dealer: $400.00

Mail your completed application and all supporting documentation to:

Tennessee Motor Vehicle Commission

500 James Robertson Parkway

Nashville, Tennessee 37243-1153

Auto dealer licenses in Tennessee are handled by the Division of Regulatory Boards under the Tennessee Department of Commerce and Insurance.

After you have submitted all documentation, there will be a physical inspection of your place of business. A final review of application documents and facility findings will be conducted after this inspection has taken place.

Note: A  $400.00 fee will apply if an applicant has to be re-inspected.