How to get a dealer license in Tennessee

Anyone who sells, or offers to sell, more than five motor vehicles in one year in Tennessee must be licensed by the Motor Vehicle Commission as a Motor Vehicle Dealer. This includes RVs, motorcycles and any other automobile, new or used.

• Motor Vehicle Dealer (new or used): Businesses that sell, offer or advertise motor vehicles for resale, including independent used dealers. This is the main license covered here.
• Franchised Motor Vehicle Dealer: Dealers selling new vehicles under a manufacturer franchise. Same dealer license, plus a manufacturer letter naming the line-makes and market area, a sworn labor rate statement, and $600 per line-make.
• RV Dealer: Dealers selling recreational vehicles. Licensed under the Motor Vehicle/Recreational Dealer rules, with a $600 fee.
• Motor Vehicle Auction: Auction houses that sell motor vehicles. Tennessee auto auctions are strictly wholesale, between licensed dealers. $1,200 fee and a $50,000 bond.
• Salesperson: People who sell vehicles for a licensed dealer. Every dealership must employ at least one licensed salesperson. $50 fee.
• Dismantler/Recycler: Businesses that dismantle or recycle vehicles. No bond is required, and general liability insurance of $250,000 is required. $600 fee.
• Manufacturer/Distributor (and Recreational): Vehicle and RV manufacturers and distributors. $2,400 fee.
• Manufacturer/Distributor Representative: Representatives of manufacturers or distributors. $600 fee.
• Motor Vehicle Shows and Displays: Listed by the Commission for vehicle shows and displays.

Surety bond. A $50,000 corporate surety bond on the Commission's Motor Vehicle Dealer Bond form (IN-1316), signed by the principal owner or owners. It must match the business name and address and include a Power of Attorney letter. It must run for two consecutive years, starting in the month the license is expected to issue. Auctions also need a $50,000 bond. Dismantlers and recyclers need no bond.

Insurance. A Certificate of Liability Insurance with at least $300,000 per occurrence, showing Garage Liability or Any Auto. It must show the full name and physical address of the licensed entity, the policy number and the policy period. Coverage must continue for the life of the license.

Place of business. A permanent facility used primarily for selling and servicing motor vehicles. Temporary facilities and private residences are not allowed, and modular units must be underpinned. The building must be at least 288 square feet with a working restroom. The display lot must be used only by the dealership, hold 15 vehicles, be compacted gravel or similar (not grass), and not be shared with other businesses. Three customer parking spots are required. The sign must have letters at least 8 inches high, be permanently installed and be visible from the road; banners do not count. Photos must show the lot, sign, posted hours and days, phone number, office and restroom. If there is no repair shop on site, you need a service agreement with a repair garage nearby. One other business may share the premises if 66% of the space is used for vehicle sales and service and it earns less than 33% of the dealership's income.

Background check. If any owner, officer or director has a felony conviction, the applicant must submit the court's final judgment or disposition order, proof of probation or parole release, and any expungement order or certificate of re-employability. The dealer license page does not mention fingerprints.

Pre-license education. Tennessee does not require a pre-license course for this license.

1. Get a Class 2 business tax license from the County Clerk (and a city license if needed) and a Sales and Use Tax Certificate from the Department of Revenue, all in the exact business name.
2. Set up a facility that meets the rules: a 288 square foot building with a restroom, a 15-vehicle display lot, 3 customer spots and a permanent sign with 8-inch letters.
3. Sign a Garage Service Agreement if you have no repair shop on site.
4. Buy a $50,000 two-year surety bond on Form IN-1316 and get liability insurance of at least $300,000 per occurrence.
5. Get a CPA-compiled financial statement showing a net worth of at least $10,000, dated within 12 months.
6. Hire at least one licensed motor vehicle salesperson.
7. Submit the Initial Motor Vehicle Dealer Application in CORE with the $600 fee, your documents and photos.
8. Pass the on-site facility inspection. The license is issued within 14 business days of approval.

Official forms:

• Initial Motor Vehicle Dealer Application (CORE online)
• Motor Vehicle Dealer Bond (IN-1316)
• Garage Service Agreement Form
• Ownership Worksheet
• Dealer Floor Plan Agreement
• Disclosure of Rebuilt or Salvage Vehicle Form

No. Tennessee requires a display lot for 15 vehicles used only by the dealership and a permanent building of at least 288 square feet with a restroom, and private residences are not allowed. The Commission lists no wholesale-only or office-only dealer license.

Tennessee automobile auctions are strictly wholesale, between licensed auto dealers, so you need a dealer license to buy there. AuctionACCESS (auctionaccess.com), which handles dealer registration for over 400 auction marketplaces, limits membership to licensed vehicle dealers and their authorized representatives.

Submit the renewal application and $600 fee in CORE before the expiration date on the license, with a new two-year surety bond that begins and ends on the expiration date. A renewal after the expiration date costs a $300 late fee, and you may not sell while the license is not renewed. After 90 days past expiration, you must reapply as a new applicant and get a new license number. Dealers also file an Annual Sales Report in CORE; a report filed after February 15 costs $100.

This is general information, not legal advice. Rules and fees change, so confirm the details with the Tennessee Motor Vehicle Commission before you apply. Last verified October 20, 2026.

Planning the business side too? Read how to start a car dealership. Used cars you offer for sale need an FTC Buyers Guide in the window. Selling your own car instead? See how to sell a car in Tennessee.