Getting a used car dealer license in Tennessee

In Tennessee, used-car dealers are licensed by Tennessee Motor Vehicle Commission.

Before your first retail sale you’ll need a $50,000, surety bond and a business location that meets the state’s rules. The state also inspects the location.

This page gathers what a new independent lot needs, each fact linked to the official source it came from.

Sources checked · details re-checked against official sources

At a glance

License
Motor Vehicle Dealer, used tn.gov (source, opens in a new tab)
Issued by
Tennessee Motor Vehicle Commission tn.gov (source, opens in a new tab)
Surety bond
$50,000, two consecutive years with aligned dates. tn.gov (source, opens in a new tab) That’s the bond’s face amount, not what you pay: a surety company charges a yearly premium, usually a small percentage of it, set mainly by your credit.
Official fees
Dealer license $600, initial and renewal; salesperson license $50. The license runs two consecutive years. tn.gov (source, opens in a new tab)
Renewal
Two-year renewal; $600, bond/insurance maintained. Late fee $300; after 90 days reapply. tn.gov (source, opens in a new tab)
Site inspection
Yes: Commission facility inspection after complete documents. tn.gov (source, opens in a new tab)

Step by step

  1. Make sure you need a dealer license

    Tennessee's Motor Vehicle Commission licenses used motor vehicle dealers. You also need at least one licensed salesperson, and franchise dealers add line-make authority. tn.gov › dealer.html (source, opens in a new tab)

  2. Find a site that qualifies

    You need room to display 15 vehicles plus three customer spaces on an improved surface, not grass, and a permanent building of at least 288 sq ft with a restroom. A private residence doesn't qualify. Get written zoning approval, or a statement that no zoning applies. Put up a permanent sign visible from the road with 8-inch letters; banners and temporary signs don't count. tn.gov › dealer.html (source, opens in a new tab)

  3. Set up the business and finances

    Register the entity and get your Class 2 local business tax and sales tax certificates, keeping the tax and DBA names identical. You need a financial statement from a CPA showing at least $10,000 net worth, and you disclose any felonies. tn.gov › dealer.html (source, opens in a new tab)

  4. Bond, insurance and a salesperson

    Get a $50,000 bond covering two consecutive years with dates matching the license, garage liability insurance of $300,000, a service agreement if you need one, and at least one licensed salesperson ($50). You don't pay that amount: a surety company charges you a premium, a fraction of it, set mainly by your credit. tn.gov › dealer.html (source, opens in a new tab) tn.gov › fee.html (source, opens in a new tab)

  5. Apply in CORE

    Submit the Initial Motor Vehicle Dealer Application in CORE with the financial, site and supporting documents. Finish within 90 days: an incomplete application past that starts over, with new fees. tn.gov › dealer.html (source, opens in a new tab)

  6. Inspection and issuance

    Once your documents are complete, the Commission inspects the facility. The license is issued within 14 business days of approval. tn.gov › dealer.html (source, opens in a new tab)

  7. Keep it current

    The license runs two years; renewal is $600 and you keep the bond and insurance in force. A late renewal costs $300 more, and after 90 days you have to reapply. tn.gov › renewal.html (source, opens in a new tab) tn.gov › fee.html (source, opens in a new tab)

The location

Display lot
15 display vehicles plus three customer spaces; improved surface, not grass. tn.gov (source, opens in a new tab)
Office
Permanent building at least 288 sq ft with restroom. tn.gov (source, opens in a new tab)
Sign
Permanent road-visible sign, 8-inch letters; no banner. tn.gov (source, opens in a new tab)
Zoning and home-based lots
Local written zoning approval or no-zoning statement; no private residence. tn.gov (source, opens in a new tab)

Before you apply

Entity, Class2 local business tax and sales-tax certificates; CPA statement showing $10,000 net worth; $300,000 garage liability; felony disclosures; service agreement if needed. tn.gov (source, opens in a new tab)

Forms

CORE Initial Motor Vehicle Dealer Application and financial/site/support documents. tn.gov (source, opens in a new tab)

Get the current versions from tn.gov; we don’t host copies.

Not the license you’re after?

Salesperson is separate; at least one licensed salesperson required. Franchise adds line-make authority. tn.gov (source, opens in a new tab)

What trips people up

Our read of the requirements above, not official guidance or statistics.

The hardest part: 15-car site and CPA-certified net worth before review.

Easy mistakes:

Questions

How much does a Tennessee dealer license cost?

$600 for two years, plus $50 per salesperson. The bond premium, $300,000 garage liability insurance, the CPA statement and a 15-car site cost more. tn.gov › fee.html (source, opens in a new tab) tn.gov › dealer.html (source, opens in a new tab)

How big does the lot have to be?

Room for 15 display vehicles plus three customer spaces, on an improved surface rather than grass. tn.gov › dealer.html (source, opens in a new tab)

Can I run a dealership from home in Tennessee?

No. A private residence doesn't qualify. tn.gov › dealer.html (source, opens in a new tab)

How long does it take?

The license is issued within 14 business days after approval. Keep the application moving: an incomplete one past 90 days starts over. tn.gov › dealer.html (source, opens in a new tab)

Sources

Not affiliated with the Tennessee Department of Revenue. Not legal advice. Requirements change; always confirm with the state.