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How Much Does a Tennessee Motor Vehicle Dealer Bond Cost?
A Tennessee motor vehicle dealer bond costs between $500 and $5,000. This is based on the state’s requirement for a $50,000 surety bond. Rather than paying for the full bond amount, you can purchase your bond from a Tennessee surety company at a premium.
Your bond premium rate will be between 1% and 10% of the mandated bond amount. The rate is determined by a combination of factors, such as your assets, professional experience and credit score. We provide surety bonds to applicants with most credit scores.
If you apply for a Tennessee motor vehicle dealer bond, also known as auto dealer bond, with a credit score of 700 or higher, you will qualify for a premium rate of 1% to 10%. If your credit score falls between 600 and 699, your premium rate will be 3% to 5%. A lower credit score qualifies for a premium rate of 5% to 10%.
Surety Bond Cost Based on Credit Score |
||||
Surety Bond Name |
Surety Bond Amount |
Over 700 |
Between 600 - 699 |
Below 599 |
Tennessee Motor Vehicle Dealer Bond |
$50,000 |
$500 - $1,500 |
$1,500 - $2,500 |
$2,500 - $5,000 |
How to Get a Tennessee Motor Vehicle Dealer Bond
1. Apply for Your Bond Online
Setting up a Tennessee motor vehicle dealer bond can be done in three simple steps. The first step is to fill out the online application. It only takes a few minutes to fill out this short form and learn about your premium rate. We provide surety bonds to more than 99% of our applicants.
A new customer, Tony, recently applied online for a motor vehicle dealer bond. He had a 608 credit score and questioned if he would qualify for the bond. Tony got an instant quote from us and made the premium payment online. After these easy steps, he received his surety bond in his inbox.
2. Review Your Quote
We take pride in providing our valued customers with quick bond quotes. In fact, most customers receive an instant, no-obligation quote after applying online. Complex applications may require up to 48 hours to process.
3. Pay the Bond Premium
The final step in our easy process is to pay your motor vehicle dealer bond’s premium online. We will then email your bond to you. If requested, we are happy to mail the bond to you as well.
Our bond experts have more than a decade of industry experience. We are available to answer your questions and guide you through challenges. Contact us today or call us at (877) 514-5146 for assistance.
Motor Vehicle Dealer Bond Requirements in Tennessee
The Tennessee Department of Commerce and Industry – Motor Vehicle Commission is the authority on motor vehicle dealer licensing and bonds. Per state law, a dealer license is required for anyone selling more than five motor vehicles over the course of a year.
To obtain and maintain a motor vehicle dealer license, the individual or business must have a $50,000 surety bond. This is established by Tennessee Code Ann. 55-17-111. Each branch location is required to have a separate motor vehicle dealer bond.
The bond’s term is two years. The bond must remain in effect to maintain the dealer license.
How to Renew & Maintain Your Motor Vehicle Dealer Bond in Tennessee
Every two years, your motor vehicle dealer bond must be renewed in order to maintain your license. The renewal documentation must be provided to the Tennessee Motor Vehicle Commission to avoid a license suspension.
Our authorized Tennessee surety bond company will contact you prior to the bond renewal date. At that time, we will provide you with an updated premium rate and renewal instructions.
What Happens If Someone Files a Claim in Tennessee?
In order to make a claim against your Tennessee auto dealership, the claimant must file the claim directly with the surety company. The surety company will complete a comprehensive examination to determine if the claim is valid. Unsubstantiated claims will be denied.
If a claim is deemed to be valid, the surety company compensates the claimant up to the bond’s penal sum. The Tennessee auto dealer must then reimburse its surety company for the total amount paid to the claimant.
How to Get Your Motor Vehicle Dealer License in Tennessee
Our Tennessee dealer license guide provides additional details about the licensing requirements and process. Documentation required to obtain a license includes:
- An online application
- Surety bond form
- An established place of business
- Photos of signage
- A Floor Plan Agreement
- A zone compliance letter
- A business tax license
- A compiled financial statement showing a net worth of at least $10,000
- Entity documents (if the business is an LLC, LP, corporation, trust or LLP)
- A Sales & Use Tax Certificate
- A franchise agreement
- Salespersons applications
- A conviction record for principals, if applicable
- Fees:
Motor Vehicle Dealer Application Fees |
|
Franchise Vehicle Dealer License Fees (per line make) |
$400 |
Used Vehicle Dealer License Fees |
$400 |
Franchise Motorcycle Dealer License Fees (per Line make) |
$400 |
Salesperson License Fees |
$35 |
Re-Inspection Fees |
$400 |
Re-Location Fees |
$40 |
For more information, contact:
Tennessee Department of Commerce and Industry – Motor Vehicle Commission
500 James Robertson Parkway
Nashville, TN 37243-0565
Phone: (615) 741-2241
What if there is a claim against my auto dealer bond?
This is an unpleasant scenario for any auto dealer. In case of a claim against you, it’s always better to try and reach a settlement before it goes to court. A valid claim can cost you a lot of money, and means that sureties will want to raise your premium next time you apply for your auto dealer bond.
Make sure you stay up-to-date on all state and federal legislation related to your industry.
In case of a dispute with a client, it’s wise to keep documentation of all communication, as this will help your case in court.
Still got questions about your Tennessee auto dealer bond? Call us at (877) 514-5146 and we’ll do our best to help. We are looking forward to working with you!
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Quick response times and turn around for issuing bonds. Great customer service and very knowledgeable. We have used Lance Surety multiple times and have never been disappointed. Highly recommend them and Collette!
Long story short, these guys cut through the B.S. and get the job done. Responsiveness, excellent! Communication, excellent! Respect for their industry partners, excellent! John, Collette, Ryan, you're all-stars! Thank you!
We decided for Lance Surety Bond's quote for 2 reasons; Price and Customer Service. Our Representative Ryan was just SUPERB!! [...] I highly recommend Lance Surety Bond for all your Bonding needs! I'll definitely come back for all of mine. :-) Thanks Ryan!
Quick response times and turn around for issuing bonds. Great customer service and very knowledgeable. We have used Lance Surety multiple times and have never been disappointed. Highly recommend them and Collette!
Long story short, these guys cut through the B.S. and get the job done. Responsiveness, excellent! Communication, excellent! Respect for their industry partners, excellent! John, Collette, Ryan, you're all-stars! Thank you!
We decided for Lance Surety Bond's quote for 2 reasons; Price and Customer Service. Our Representative Ryan was just SUPERB!! [...] I highly recommend Lance Surety Bond for all your Bonding needs! I'll definitely come back for all of mine. :-) Thanks Ryan!