Tennessee Used Motor Vehicle Dealers Surety Bonds
The State of Tennessee Department of Commerce and Insurance, Regulatory Boards Division, Tennessee Motor Vehicle Commission is responsible for compliance of state motor vehicle dealer and manufacturer licensing laws, rules and regulations. The Motor Vehicle Commission is tasked with licensing of all franchise and Used Motor Vehicle Dealers also known as used car dealers or used auto dealers.The Tennessee Code Annotated Title 55 Chapter 17 provides details on used vehicle dealer licenses.
Surety Bond and License Requirements:
- Complete the motor vehicle dealer license application and pay the applicable fee.
- Complete the “Eligibility Verification for Entitlements Act Attestation.”
- Obtain a $50,000 surety bond and submit the original to the state. The name on the bond must be exactly the same as the entity being license and requires the physical location of the applicants business address.
- The bond and license period is for two years.
- Provide a Certificate of Liability of Insurance with a minimum of $300,000 liability insurance per occurrence, include garage liability coverage.
- Provide a copy of a current business tax license obtained in the county in which the business will be located.
- Obtain business office of at least 288 square feet, a display lot with minimum space for 15 vehicles and signage that meets the Commission requirements.
- Provide copy of written approval form a county or municipality entity as to zoning compliance of the motor vehicle auction business.
- Provide a Service Agreement with a repair garage location if the applicant's business will not have a mechanic on site.
- Provide financial statements with a compilation letter from a CPA that shows a minimum net worth of at least $10,000.
- Provide financial disclosure for any owner, partner, director, etc. having a 5% or more stock or share interest in the company.
- Provide a copy of a current Tennessee Department of Revenue Sales & Use Tax Certificate.
- Provide a copy of the charter for corporation, LLC, or LLP (if any). If business is an out-of-state corporation or LLC, provide a copy of the Certificate of Authority to do business in Tennessee.
- All salesperson applications must be submitted with the original application.
- Provide a final copy of judgement and or disposition signed by the court of issuance, for any owner, officer, partner, etc. convicted of a felony. Further requirements can be found on the dealer application.
How Much Will a Tennessee Used Auto Dealer Bond Cost?
The premium that you pay for a Tennessee Used Motor Vehicle Dealer Surety Bond is dependent on credit. Our rates start at 1.25% of the bond amount with good credit. Contact our Surety Bond Specialists for a free quote.
Did You Know?
Each used motor vehicle dealership branch, satellite location or other location requires a separate application and surety bond.
Related Links: Tennessee Business Name Change Form Tennessee Dealer Floor Plan Agreement Tennessee Minimum Requirements for Motor Vehicle Dealer License Tennessee Motor Vehicle Commission Fee Schedule Tennessee Helpful Information for Motor Vehicle Dealers Federal Trade Commission Dealer's Guide to the Used Car Rule
More Surety Bond Questions?
Check out our FAQ page or What’s a Surety Bond? page. Should you need or choose to buy a surety bond, buy from us. SuretyGroup.com has been underwriting surety bonds throughout the U.S. for more than 35 years. When you work with us, you enjoy the unique benefit of dealing with a team of highly experienced surety agents with in-house underwriting authority. This allows you to receive competitive, low rates, quick approvals, and immediate bond delivery. In most cases, your bond will be delivered within 24 hours after you apply for it.
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