Who needs Tennessee Motor Vehicle Dealer And Other Bonds?
Auto dealer bonds are required for anyone applying for a Tennessee motor vehicle dealer license. This includes new car dealers, used car dealers, and wholesalers.
The Tennessee Motor Vehicle Commission requires this bond as part of the licensing process. The bond is designed to protect customers and the state by ensuring that dealers follow licensing laws and conduct business honestly. If a dealer violates regulations and causes financial harm, a claim can be made against the bond.
The bond is required before your dealer license can be issued and must remain active for the full license term.
How much do Tennessee Motor Vehicle Dealer Bonds cost?
In Tennessee, the required bond amount for auto dealers is $50,000.
You do not pay the full $50,000. Instead, you pay a small percentage of that amount as your premium. Most applicants pay between 1% and 3% of the bond amount annually, depending on credit, financial background, and industry experience.
Applicants with strong credit typically qualify for the lowest rates. Your exact rate is determined after a review of your credit and application details.
How do I get a Tennessee Motor Vehicle Dealer Bond?
Getting your Tennessee auto dealer bond is a straightforward process:
- Complete a short bond application.
- The surety company reviews your credit and background information.
- You receive a quote based on your qualifications.
- Once payment is made, the bond is issued for filing with the state.
Tennessee dealer bonds are issued for a two-year term and must begin on the first day of the month. Your dealer license term will match the bond’s effective and expiration dates, so it’s important to keep the bond active to avoid license issues.
Can I get a Tennessee Motor Vehicle Dealer Bond with bad credit?
Yes, you can still get a Tennessee auto dealer bond with less-than-perfect credit.
While your credit score does impact your rate, most applicants are still able to secure a bond. Higher risk profiles may result in a higher premium, but bad credit alone does not automatically disqualify you.
How fast can I get Tennessee Motor Vehicle Dealer Bonds?
In most cases, auto dealer bonds can be approved the same day once your application is submitted and reviewed.
After payment is received, the bond is issued and ready for filing with the Tennessee Motor Vehicle Commission. This helps keep your licensing process moving without unnecessary delays.
Are there any local requirements?
In addition to the bond requirement, Tennessee has specific business location and licensing standards you must meet before your dealer license is approved.
Your established place of business must meet state requirements, including minimum square footage, restroom access, proper signage, and an adequate display lot. You must also provide proof of liability insurance, obtain a business tax license, submit required financial and corporate documents, complete a background disclosure, and pay all licensing fees.
Because the bond term and license term are tied together, keeping your bond active is essential to maintaining your dealer license.
If you’re unsure which bond you need, BOSS Bonds can review your licensing paperwork and help identify the correct bond at no cost.
