Tennessee Dealer Licensing Guide
Getting Your Tennessee Motor Vehicle Dealer License
An orientation to the process, what to expect, in what order, and who to ask.
Before You Begin
This guide is a general orientation only. Always confirm current requirements directly with the Tennessee Motor Vehicle Commission before spending money or submitting anything.
The authority on this process
Tennessee Motor Vehicle Commission
Department of Commerce and Insurance
500 James Robertson Parkway
Nashville, TN 37243
Phone: 615-741-2711
Initial Motor Vehicle Dealer Applications are completed online through Tennessee's CORE licensing portal.
The governing law
Tennessee Code Annotated, Title 55, Chapter 17, and Commission rules.
Welcome and Congratulations
Tennessee is among the more demanding states in this process. It sets specific physical standards for the facility and lot, requires a CPA-prepared financial statement, and requires the dealership to employ a licensed salesperson before conducting business.
Wayne Reaves has worked alongside independent dealers for years. We are not a licensing service and do not file on your behalf, but this guide lays out the shape of the process so you know what is coming.
There is a completion clock on the application.
Tennessee requires documentation to be complete within the Commission's defined window. If it is not, the process can restart with new fees. Assemble the slow items first, including the CPA statement, zoning letter, and bond, before starting the application.
The Shape of the Process
Several Tennessee requirements come from third parties and can take time. Start those first.
- 01Facility & Display LotPrepare a permanent facility and display lot meeting the Commission's physical standards.
- 02Zoning ApprovalObtain a written zoning letter or no-zoning statement from the local authority.
- 03Business Tax LicenseObtain the County Clerk business tax license in the exact licensed entity name.
- 04Financial StatementHave a CPA prepare the required compiled financial statement and net worth documentation.
- 05Corporate DocumentationAssemble formation documents, ownership information, and any Certificate of Authority.
- 06Surety BondObtain the corporate surety bond written for the Commission's required term.
- 07Insurance & Service AgreementMaintain qualifying liability coverage and, if needed, a repair-service agreement.
- 08Sales & Use Tax CertificateObtain the current certificate from the Tennessee Department of Revenue.
- 09Signage & PhotographsInstall compliant signage and prepare the required digital photographs.
- 10Salesperson & Other ItemsHave a licensed salesperson and address franchise or floor-plan requirements if applicable.
- 11Conviction RecordsProvide required court disposition records when applicable.
- 12Application & InspectionFile through CORE, submit the documents, and pass the on-site inspection.
Why we do not list dollar amounts or dimensions here: Bond amounts, net worth minimums, insurance limits, application fees, square footage, and lot-capacity rules can change. Work from the Commission's current requirements page and application.
Your Facility & Display Lot
Tennessee requires a permanent facility primarily used for selling and servicing motor vehicles. Temporary facilities and private residences are not permitted. The Commission sets current minimum building, restroom, lot, surfacing, customer-parking, and capacity requirements.
The display lot must be devoted to the dealership and generally should not be shared with other businesses. Tennessee permits a narrow exception for one additional business if the current Commission requirements are satisfied.
Confirm the current facility dimensions, lot capacity, surfacing, parking, and shared-business rules before signing a lease or spending money on site work.
Zoning Approval
Provide written approval from the local zoning authority. If no zoning restrictions apply, obtain a statement from the appropriate county or municipal official confirming that.
The letter should identify the address and confirm that automobile sales are permitted. This comes from your city or county, not from the state.
Business Tax License
A current business tax license from the County Clerk is required in the exact name of the entity being licensed, including any d/b/a.
Tennessee specifies a business-license classification for dealers. Confirm the current classification with the Commission or County Clerk.
Financial Statement
Tennessee requires a compiled financial statement prepared in the name of the business, showing the required minimum net worth, prepared in accordance with GAAP, and signed by a CPA on the CPA's letterhead with the required license information.
The statement must be recent relative to the application date. Additional financial background disclosures may apply to owners at or above the current ownership threshold.
Start coordinating this early.
The financial statement is one of the items most likely to delay an otherwise ready application. Ask your CPA about timing as soon as you have a target filing date.
Corporate Documentation
Corporations, LLCs, LLPs, and trusts submit the entity's charter or articles of organization. Out-of-state entities provide a Certificate of Authority to do business in Tennessee.
Ownership, officers, members, the managing partner, and registered agent information must be disclosed as required by the Commission.
Which business structure is right for you is a question for an attorney or CPA. In Tennessee, it also affects which documents and financial disclosures are required.
Surety Bond
Tennessee requires a corporate surety bond signed by the principal owner or owners. The business name and address must match exactly, and the required power of attorney must be attached.
The bond term is unusually specific.
Tennessee requires the bond to cover the Commission's specified two-year period tied to the expected license issuance month. Coordinate the bond start date with your expected issuance date.
Additional locations generally require their own bond. Confirm the current amount, form, and term rules with the Commission or a licensed surety agent before purchasing.
Choosing a provider
Wayne Reaves does not sell bonds or insurance, does not recommend a particular provider, and receives nothing if you choose one company over another. Compare quotes from licensed providers.
Liability Insurance & Service Agreement
Tennessee requires a certificate showing qualifying garage liability or any-auto coverage at the Commission's current minimum per-occurrence limit. It must identify the licensed entity, physical address, policy number, and policy period.
Coverage is a continuing obligation for the life of the license.
If there is no mechanical repair facility at the dealership, Tennessee requires a service agreement with an operating repair garage within a reasonable distance. Changes to that designated facility must be reported within the Commission's required window.
Sales & Use Tax Certificate
Submit a copy of the current Sales & Use Tax Certificate from the Tennessee Department of Revenue showing the identification number, exact licensed entity name, physical address, and any d/b/a.
The single most common delay: name and address mismatches.
The bond, insurance certificate, business tax license, sales tax certificate, corporate documents, and application must match. With a fixed completion window running, even a small mismatch matters.
Signage & Photographs
The Commission sets current sign-lettering requirements. The dealership name must be clearly displayed on a permanently installed sign visible from the road. Temporary banners do not satisfy the requirement.
Digital photographs must cover the Commission's current list, including the display lot, sign, posted hours and days, phone number, office, restroom facilities, and street views showing the building, entrances, and exits.
Read the current photograph checklist before taking the pictures.
Salesperson, Franchised Dealers & Floor Plan
Licensed salesperson
A Tennessee dealership must employ at least one licensed motor vehicle salesperson to conduct business. If the owner will sell vehicles, a separate salesperson license may also be needed.
Franchised dealers
Franchise applicants provide manufacturer or distributor acknowledgment information and required retail and warranty labor rate statements.
Floor plan financiers
If inventory financing is used, floor-plan financier information must be kept current with the Commission. This is an ongoing reporting obligation.
Conviction Records
If an owner, officer, or director has a felony conviction, Tennessee requires court documentation showing the final judgment or disposition and related information. Additional records may be required concerning probation, parole, expungement, or re-employability.
If you are unsure whether something must be disclosed, disclose it or ask an attorney. Do not guess and do not omit.
Application, Fees & Inspection
The Initial Motor Vehicle Dealer Application is completed online through Tennessee's CORE portal. Required documentation is submitted before the on-site facility inspection.
Final eligibility is determined after both the document review and inspection.
If the documentation is not complete within the Commission's required window, the process can restart with new fees. Assemble the file before you start the clock.
Renewal
Tennessee dealer licenses run on a multi-year cycle. Insurance, the service agreement where applicable, and floor-plan disclosures are continuing obligations rather than one-time submissions.
Confirm your renewal date and ongoing requirements with the Commission when the license is issued, and calendar them.
Federal Obligations Start on Day One
State licensing is not the whole picture. Federal rules apply when you begin selling, including the FTC's Used Car Rule requiring a Buyers Guide on used vehicles offered for sale. Other federal rules apply to advertising, financing, and recordkeeping.
Ask your attorney or state association what applies to your operation.
How Wayne Reaves Fits In
We want to be straightforward about what we do and do not do.
What we do not do
- File applications
- Form business entities
- Sell bonds or insurance
- Prepare financial statements
- Provide legal or tax advice
- Interpret state requirements on your behalf
Those questions belong with the Tennessee Motor Vehicle Commission, your attorney, your CPA, and licensed agents.
We also do not receive compensation or referral fees from bond or insurance providers.
What we do
We build dealer management software and dealer websites for independent dealers.
- Inventory
- Deal tracking
- Customer records
- Reporting
- Compliance tools
- Dealer websites that put inventory in front of buyers
Where to Get Answers
Disclaimer
This guide is provided for general informational purposes only and is intended as a high-level overview of the dealer licensing process. It is not intended to be comprehensive and should not be relied upon as legal, tax, financial, insurance, regulatory, or licensing advice. Laws, regulations, agency procedures, forms, fees, bond and insurance requirements, deadlines, and other licensing requirements may change at any time and may vary based on license type, business structure, location, or individual circumstances.
Wayne Reaves Computer Systems Inc. does not represent or warrant that the information contained in this guide is complete, current, or applicable to every situation. Before making financial commitments, signing a lease, purchasing insurance or a bond, submitting an application, or otherwise acting in reliance on this information, verify all current requirements directly with the appropriate state and local licensing authorities and consult qualified legal, tax, insurance, or other professional advisors as appropriate.
Use of this guide does not create an attorney-client, advisory, fiduciary, or other professional relationship with Wayne Reaves Computer Systems Inc.