Tennessee Dealer License Requirements

Obtain a Tennessee Dealer License Application

The first step in obtaining your Tennessee dealer license is to complete Tennessee dealer license application. You can download your Tennessee dealer license application by clicking here: http://www.state.tn.us/commerce/boards/mvc/documents/DealerApplication.pdf

Dealership Business Building

Before you obtain a Tennessee Dealer License you must have a building that is solely for the operation of your dealership. The State of Tennessee does not allow more than one business to operate out of this location. If your Tennessee dealer office is in the same building as another building, it must be separated by a wall and if a door connects the two businesses, the door must be permanently sealed. The Tennessee Motor Vehicle Commission does not grant a dealer license at any residential home. You must have a commercial business location to operate your dealer lot to sell motor vehicles. The State of Tennessee also requires that you have a 288 square foot interior office. The building that housed the Tennessee Dealer lot must also have at least one restroom.

Working Telephone

Before you are granted a Tennessee Dealer license you must have a working telephone in your business. The State of Tennessee does not allow a cell phone or cordless phone that reaches from another building to serve as your official phone therefore you must have a land line. The State of Tennessee wants to make sure you are accessible to your customers at all times. A working telephone is a Tennessee Dealer License Requirement.

Hours of Operation

When you obtain your dealers license the Tennessee Motor Vehicle Commission requires that maintain a certain amount of business hours. Your Tennessee dealership hours of operation must be posted prominently on the door of your dealership or on your dealership sign. You must have your dealer lot open a minimum of 3 days a week for a minimum of 12 hours a week. Your hours of operation are your choice as long as they are between 8:00AM and 7:00PM. At least 8 of the hours that your dealership is open must be Monday through Friday. Your dealership must be staffed during your minimum hours of operation. Failure to be open at least 3 days and 12 hours a week can lead to revocation or your Tennessee dealer license.

Display Lot

In order to obtain a TN dealer license you must have a display lot on the exterior of your building that holds at least 15 vehicles of the type that you are selling. You must also have at least 3 parking spots that are solely for the use of your customers. Remember, before you obtain a Tennessee dealer license you must have room for at least 15 vehicles of your inventory and 3 parking spaces for your customers.

Photographs of Dealer Location

The State of Tennessee requires you to submit several photographs of your dealership before you are granted a Tennessee dealer license. Be sure your photographs include your business building, office, restroom, business sign, hours & days of operation, entire display lot, and your phone number.

Tennessee Dealer Sign

You must have a permanent sign before the State of Tennessee will approve your dealer license application. The Tennessee Motor Vehicle Commission wants your dealership name on the sign in at least 8 inch or larger letters. Your dealer sign must be permanent in nature and must be clearly viewable to the nearest roadway. Be sure to post your hours of operation somewhere on the front of the building.

Tennessee Dealer Garage Insurance

Tennessee State Law requires you to obtain dealer garage insurance before you may obtain a TN dealer license. You must keep your Tennessee Dealer insurance in effect the entire time you have an active Tennessee dealer license. You must obtain a dealer garage insurance policy with a minimum of $300,000 per occurrence. The address on the dealer garage policy must match the address of the dealer lot. The certificate holder on the dealer garage policy must be the Tennessee Motor Vehicle Commission. Be sure to include a copy of your dealer lot insurance when you mail in your Tennessee dealer application packet. You may obtain your Tennessee dealer garage insurance by clicking here.

Dealer Surety Bond

The Tennessee Motor Vehicle Commission requires you to obtain a Tennessee dealer surety bond in the amount of $50,000 with duration of 2 years. You can get a dealer surety bond from most Tennessee insurance agents or any Tennessee bonding company. Surety bonds protect customers from fraudulent automobile dealers. If you have good credit a $50,000 dealer surety bond should cost around $350 to $400. If you have less than perfect credit, your Tennessee dealer bond pricing could be much higher. Be sure to enclose your original dealer surety bond in our dealer application packet. You can download a copy of your dealer bond here.

Repair Faculty

If the location you are applying for your Tennessee dealer license does not have a repair facility, you must provide the State of Tennessee with a Service Agreement with a repair facility. You can download a Tennessee Service Agreement by clicking here. The State of Tennessee wants to make sure you have a working relationship with a reputable repair facility if you do not have a repair shop at your Tennessee dealership location. This will ensure the best possible customer service. You must also include a completed labor rate form. You can download the Tennessee labor rate form by clicking here.

Zoning Certification

You must submit written verification to the Tennessee Motor Commission that your dealership meets all local zoning requirements. You must contact your Office of the County Executive or Office of the Municipality for this written verification. Just call your zoning authority, tell them that you need zoning compliance so you can open an automobile dealership. They should be able to mail you this verification but some offices may require you to pick up the verification in person.

Records of Conviction

If you or any other officers on the Tennessee dealer license application have committed a felony or crime of moral turpitude you must furnish a copy of any court records. Committing a crime of this nature in your past does not necessarily mean you will be denied a Tennessee dealer license. The Tennessee Motor Commission will review each application on a case by case basis.

Franchise Agreement

If you are a franchised dealer selling brand new vehicles you must send a copy of your factory franchise trade agreement or a letter from the manufacturer stating that you have permission to sell their vehicles. If you are selling only used vehicles, you will not be required to submit a franchise agreement with our dealer license application.

Tennessee Business Tax License

You must obtain a business tax license by your County Clerk before the Tennessee Motor Vehicle Commission will grant your TN dealers license. Just call or stop by your County Clerk’s office to apply for business tax license. The fee for the Business Tax License is $15.00. If you have further questions about the Tennessee Business Tax License you may call the Tennessee Department of Revenue at 605-253-0600 or you can start the online application process to gain a Tennesse Business Tax License by clicking here.

Tennessee Sales Tax Identification Number

 You must apply for a Tennessee Sales Tax Identification Number before you can obtain your dealer license... You can apply for your TN Sales Tax ID number by clicking here: https://apps.tn.gov/bizreg/ or calling 605-253-0600. Be sure to include this information in your dealer application packet.

Financial Background Disclosure

You must provide the Motor Vehicle Commission with a Financial Background Disclosure before you are granted a dealers license. The Tennessee Motor Vehicle Commissions will provide you with this form by calling 615-741-0651
Financial Statement or you can download it by clicking here.

You will be required to provide the TN Motor Vehicle Commission with a financial statement that proves you have a net worth of at least $10,000. You can contact your bank to have this form completed. It must be prepared by a Public Accountant or a Certified Public Accountant. Your bank should be able to provide this service to you free of charge or for a nominal fee. The financial disclosure statement must be dated less than one year before submitting you dealer license application to the Tennessee Motor Vehicle Division. If the financial disclosure statement was completed more than 12 months ago, the Motor Vehicle Division will require a new financial disclosure statement.

Articles of Incorporation

If you are a Tennessee Corporation, Limited Liability Corporation, or Limited Liability Partnership, you must provide a copy of the charter as filed with Tennessee Secretary of State’s Office. If you are an out of State Corporation or Limited Liability Corporation you must provide a Certificate of Authority to do business in Tennessee. If you have questions about Tennessee Articles of Corporation or how to apply for a Certificate of Authority you can contact the Tennessee Secretary of State’s Division of Business Services by clicking here or calling 615-741-2286.

Salesperson License

All sales persons and all owners that are conduct sales at the dealership must apply for a Tennessee Salesperson License. You can apply for a Tennessee Salesperson License by clicking here: http://state.tn.us/commerce/boards/mvc/documents/newsalespersonapplication.pdf

Tennessee Dealer License Fees

New Dealer License Fees               $400.00 per line make
Used Dealer License Fees               $400.00
New Motorcycle License Fees          $400.00 per line make
Used Motorcycle License Fees         $400.00

Mail Dealer License Application and Paperwork

When you have completed all of the steps above you will mail the following paperwork:

Tennessee dealer license application,
Check or money order for $400 per line make
Original 2 year dealer surety bond
Copy of zoning letter
Copy of repair agreement
Copy of sales tax certificate of registration
Copy of county business tax license
Copy of city business tax license if applicable
Copy of financial disclosure
Photographs of your business building, office, restroom, business sign, hours & days of     operation, entire display lot, and your phone number
Financial statement prepared by accountant
Original certificate of dealer garage insurance
If you are a corporation include a copy of articles of incorporation
If you are a new dealer, a copy of your factory franchise trade agreement
If you are a new dealer, a copy of your labor rate form

Make all paperwork and appropriate fees to:
Tennessee Motor Vehicle Commission
500 James Robertson Parkway
Second Floor
Nashville, Tennessee 37243-1153

If you have any questions about how to obtain a Tennessee Dealers License you may contact the Tennessee Motor Vehicle Commission at 615-741-2711.

Good luck in your efforts to obtain a Tennessee Dealer License

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