Tennessee Vehicle Dealer License

Name your Dealership

Your company name is the first step, because you use it through the entire Dealer License process. Tennessee's Motor Vehicle Dealer application accepts a sole proprietorship, partnership, corporation, LLC, LLP, or trust.

An LLC keeps your business separate from your personal life and adds trust to the name. The application lists every owner, officer, or member holding more than 5%, and an entity submits its charter or articles of organization. An out-of-state entity also needs a Tennessee Certificate of Authority.

With an LLC or corporation, you can add an owner and keep your license. Report the change to the Commission in writing within 30 days (T.C.A. § 55-17-111(e)).

Choose your Dealer License Type

Tennessee's 5 main Dealer License types share the Commission's CORE portal, and most people apply for the Motor Vehicle Dealer License. It covers new, used, or both on one license.

A wholesale-only business holds that same license, because Tennessee has no separate wholesale license. Tennessee licenses salespeople separately.

Get your Dealer Bond (Surety Bond)

A Tennessee Motor Vehicle Dealer License requires a $50,000 surety bond, filed with the Commission on its own form, IN-1316 (T.C.A. § 55-17-111(g)). The bond protects your customers if you break Tennessee's title and dealer laws. A $50,000 Dealer Bond costs only $500 a year, after a credit check.

The bond is written for two consecutive years. It starts in the month your license is expected to issue and ends on the last day of that month two years later. It stays in force while you hold the license. A Motor Vehicle Auction License needs its own $50,000 bond, which expires June 30 of the next odd-numbered year.

Dealer 101 Insurance Services
Licensed in Tennessee · NPN 22346185

Get your Garage Liability Insurance

A Tennessee Motor Vehicle Dealer License requires a certificate of comprehensive garage liability insurance with a minimum of $300,000 per occurrence (Rule 0960-01-.15). That is the limit of the policy, not the cost; your insurance agent quotes the price. It covers every premises and operation listed on your application and stays in force for the life of the license.

The certificate must:

• show Garage Liability or Any Auto coverage
• name the licensed entity exactly
• show the licensed physical address
• include the policy number and policy period

A Motor Vehicle Auction License requires $500,000 in garage keepers legal liability insurance instead (Rule 0960-01-.16). Dealers must also comply with Tennessee's workers' compensation law.

Set up your Dealer Office (Established Place of Business)

A Tennessee Motor Vehicle Dealer License requires an established place of business, and the Commission's checklist says: “Temporary facilities and private residences are not allowed.” The law defines it as a permanent structure with signs, facilities, and office space used only for the vehicle business (T.C.A. § 55-17-102(8)). The table below is the Motor Vehicle Dealer License standard.

If you move, you file a new application and tell the Commission in writing within 30 days of the planned move (Rule 0960-01-.21(6)). The new location is inspected against the same standard.

Disclose your Background (Conviction Record)

A Tennessee Motor Vehicle Dealer License has no fingerprint or Live Scan requirement; the background check is a disclosure. The application asks whether any owner, officer, or director has a felony conviction. The Commission screens every manager, director, and owner with a 5% or greater stake (Rule 0960-01-.08(4)).

If you have a record

• Waiting period. The Commission may deny a license for a crime of moral turpitude within 5 years of the end of your sentence. The clock includes parole or probation, whichever ended later (T.C.A. § 55-17-114)
• Disclose it. Attach the court's final judgment or disposition order with the disposition date and the judge's signature. Include any probation or parole release paperwork
• The way back. With a Certificate of Employability, the Commission can't deny you based solely on your record and must decide case by case (T.C.A. § 40-29-107). Attach it to your conviction paperwork; an expungement order may need to be submitted too
• If denied. You get a hearing under the Uniform Administrative Procedures Act, with court review after that (T.C.A. § 55-17-122)
• Once licensed. Report any new guilty plea or conviction for odometer tampering or another crime of moral turpitude within 60 days

Submit your Dealer License Application

You apply online through the Commission's CORE portal, and the fee is $600 for two years, whether you sell new, used, or both. A franchised dealer also pays $600 per line-make and files the manufacturer's acknowledgment letter and a sworn labor-rate statement. Every fee is itemized under costs.

You'll also need:

• a financial statement; Tennessee requires a dealer to have $10,000 in net worth
• a Sales & Use Tax Certificate from the Department of Revenue, in the exact licensed name and physical address
• a business tax license from your County Clerk, in the entity's name
• an Ownership Worksheet with the date of birth, home address, and SSN of every owner holding more than 5%

Pass the Site Inspection

A Commission inspector visits your Tennessee location after you submit the application and every document, and before the license is issued. Final eligibility is decided after the inspection and the document review. In practice, Commission staff handle routine applications between the board's quarterly meetings, which hear appeals of denials.

Get your Dealer License Plates

Tennessee dealer plates come from the Department of Revenue, not the Commission, once you have your dealer number. The first plate is $47.30 and each additional plate is $23.65, up to 225 in a registration year (T.C.A. § 55-4-226). Dealer tags let you drive your inventory.

How many you can get depends on your sales. Every dealer files an annual sales report by February 15. Sell 24 or more vehicles a year, and you're presumed eligible for plates up to the cap. Sell fewer, and you're capped at 3 unless you ask in writing with a reason (T.C.A. § 55-17-125).

Plates expire May 31 every year, and renewal issuance runs May 1 to 31. Used-vehicle dealer plates are red with white characters; new-vehicle dealer plates are white with black. A customer can drive on your plate for up to 72 hours, or while you service their own vehicle. The law doesn't spell out personal use by owners or officers.

Dealer License Cost

A Tennessee Motor Vehicle Dealer License costs $600 for two years, the same fee at issuance and every renewal. The fee is higher than most states. Every other fee on this page is in the table.

Dealer License Renewal

A Tennessee Dealer License is valid for two years, and renewal costs the same $600 (T.C.A. § 55-17-112). The bond is written for the same two years, so both come due together. A renewal postmarked after the expiration date carries a 50% penalty.

• Active-duty service members get 6 months after release from active duty to renew, with no late fee (Rule 0960-01-.28(3))

Support

The Tennessee Motor Vehicle Commission issues every license on this page. Dealer plates are a Department of Revenue question.