How to Get a Dealer License in Tennessee
In Tennessee, dealer licensing runs through the Tennessee Motor Vehicle Commission (MVC). To get a used car dealer license in Tennessee you'll need a registered business, a compliant location, a $50,000 surety bond, and the fees below. Whether you're opening a car lot, going wholesale-only, or starting a buy-here-pay-here operation, this guide walks the Tennessee auto dealer license requirements, real costs, and the exact steps — in plain English. Rules change, so verify everything against the Tennessee Motor Vehicle Commission (MVC)'s current pages before you file.
- Surety bond
- $50,000
- License term
- Licenses are typically renewed annually — the renewal application and fee are due before the expiration date printed on the license (the surety bond runs on a two-year cycle). Late payment triggers a penalty that the Commission says is never waived.
- Sales threshold
- Anyone who sells, or offers to sell, more than five (5) motor vehicles in a 12-month period must be licensed.
- Pre-licensing
- Tennessee does not impose a formal state pre-licensing education course or exam like some states; the gate is a passing on-site facility inspection plus a 14-item documentation package (bond, zoning approval, business tax license, financial statement, insurance, etc.). Verify current requirements with the MVC.
License types in Tennessee
| License type | What it covers |
|---|---|
| Motor Vehicle Dealer | Retail and wholesale sales of new and used automobiles from an established place of business — the standard dealer license. |
| Recreational Vehicle (RV) Dealer | Sales of motor homes, travel trailers, and other recreational vehicles under the same license framework. |
| Motor Vehicle Auction | Wholesale dealer-to-dealer auction operations — licensed and priced separately from a dealer license. |
| Manufacturer / Distributor | Manufacturers and distributors of motor vehicles; franchised new-car dealers are tied to a manufacturer's line-make. |
What it costs
| Item | Cost | Notes |
|---|---|---|
| Dealer license (initial and renewal) | $600 | Same fee for a Motor Vehicle Dealer or RV Dealer license; a fee increase took effect June 1, 2026 — confirm current amount with the MVC |
| Each additional franchised line-make | $600 | Charged per line-make for franchised/new-car dealers |
| Motor vehicle auction license | $1,200 | Initial and renewal; wholesale auction operations |
| Surety bond (face amount) | $50,000 | Annual premium you pay is a fraction of this, based on credit |
| Local permits / zoning / business tax | Varies | County/city zoning approval and business tax license are part of the application package |
Step by step
- Form and register your business entity and secure county/city zoning approval and a business tax license.
- Establish a compliant location that passes the premises rules (288+ sq ft, restroom, 15-vehicle graveled display lot, customer parking).
- Obtain the $50,000 two-year corporate surety bond in the exact business name and address.
- Assemble the 14-item documentation package (bond, zoning, financial statement, insurance, tax license, etc.).
- File the Initial Motor Vehicle Dealer Application online through core.tn.gov and pay the $600 fee.
- Pass the MVC on-site facility inspection — licenses are issued within about 14 business days of approval.
Premises & temp tags
Location: An established place of business — a permanent facility of at least 288 square feet with a functioning restroom, a display lot (minimum 15 vehicles) surfaced with compacted gravel or similar material (not grass), and three customer parking spaces. A temporary facility or private residence does not qualify.
Temp tags / plates: Dealers issue temporary drive-out tags to buyers using the Temporary Plate Application (RV-F1320301), processed through the county clerk; an Application for Temporary Operation Permit (RV-F1314401) covers other short-term operation. Temporary tags are valid for a limited window (commonly around 30 days) — confirm the current term with the Department of Revenue.
Tennessee-specific things to know
- The display lot must be compacted gravel or similar surfacing — a grass lot will fail inspection, and inspectors verify the 15-vehicle minimum and restroom in person.
- Licensing (the MVC, under Commerce & Insurance) and titling/registration (the Department of Revenue, via county clerks) are separate agencies — dealers deal with both.
- Tennessee requires a signed rebuilt/salvage disclosure before selling any rebuilt or salvage-titled vehicle, on top of the federal Buyers Guide.
- A fee increase took effect June 1, 2026 — check the MVC fee schedule for the current dollar amounts before you apply.
Official Tennessee resources
- Tennessee Motor Vehicle Commission ↗
- MVC — How to Get a Dealer License ↗
- TN Dept. of Revenue — Title & Registration ↗
Tennessee dealer license FAQ
How much does a dealer license cost in Tennessee?+
Dealer license (initial and renewal): $600; Each additional franchised line-make: $600; Motor vehicle auction license: $1,200; Surety bond (face amount): $50,000; Local permits / zoning / business tax: Varies. Plus the $50,000 surety bond (you pay a small annual premium on that, not the full amount).
How big is the dealer bond in Tennessee?+
Tennessee requires a $50,000 surety bond. A $50,000 corporate surety bond is required, valid for two consecutive years and signed by the principal owner(s), matching the licensed business name and address.
Do you need a physical lot to get a dealer license in Tennessee?+
An established place of business — a permanent facility of at least 288 square feet with a functioning restroom, a display lot (minimum 15 vehicles) surfaced with compacted gravel or similar material (not grass), and three customer parking spaces. A temporary facility or private residence does not qualify.
How many cars can you sell in Tennessee without a dealer license?+
Anyone who sells, or offers to sell, more than five (5) motor vehicles in a 12-month period must be licensed.
How long is a Tennessee dealer license valid?+
Licenses are typically renewed annually — the renewal application and fee are due before the expiration date printed on the license (the surety bond runs on a two-year cycle). Late payment triggers a penalty that the Commission says is never waived.
Is dealer training or an exam required in Tennessee?+
Tennessee does not impose a formal state pre-licensing education course or exam like some states; the gate is a passing on-site facility inspection plus a 14-item documentation package (bond, zoning approval, business tax license, financial statement, insurance, etc.). Verify current requirements with the MVC.
How do temporary tags work for Tennessee dealers?+
Dealers issue temporary drive-out tags to buyers using the Temporary Plate Application (RV-F1320301), processed through the county clerk; an Application for Temporary Operation Permit (RV-F1314401) covers other short-term operation. Temporary tags are valid for a limited window (commonly around 30 days) — confirm the current term with the Department of Revenue.
Data verified 2026-07-17. Requirements change — confirm with the Tennessee Motor Vehicle Commission (MVC) before filing.
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