What Is the Tennessee Motor Vehicle Dealer Bond?
A Tennessee motor vehicle dealer bond is a money guarantee. It protects your buyers, not you. If a customer is wronged, they can claim against it. The surety pays them, then you repay the surety.
In Tennessee, the bond is $25,000.
Who Needs This Bond in Tennessee?
- Anyone selling vehicles for profit in Tennessee must carry the bond to get a dealer license.
- Dealers who sell to other dealers need it too.
- At renewal, you keep the bond active.
How Much Will the Bond Cost?
Tennessee dealer bonds are credit-priced. Most established dealers pay $250–$500 annually:
| Credit Profile | Annual Premium | Approx. Rate |
|---|---|---|
| Excellent Credit | $250 – $375 | 1% – 1.5% |
| Good Credit | $375 – $625 | 1.5% – 2.5% |
| Fair Credit | $625 – $875 | 2.5% – 3.5% |
| Credit Challenges | $875 – $1,000 | 3.5% – 4% |
| Past Credit Issues | $1,000 – $1,250+ | 4% – 5%+ |
How to Get Bonded — Step by Step
- Start your Tennessee dealer license application.
- Buy your motor vehicle dealer bond here. Most quotes come back fast.
- File the bond to the TN Motor Vehicle Commission.
- Once approved, get your license and start selling.
Renewal & Continuous Bond Coverage
Your Tennessee dealer license runs on a set cycle (every year). Keep the bond current. A gap can suspend your license.
Frequently Asked Questions
Does the Tennessee bond protect me?
No. The bond protects your customers and the state, not you. If a claim is paid, you repay the surety. It is not insurance for you.
How fast can I get bonded in Tennessee?
We shop several sureties for you, often within a day. Many bonds are issued the same day for good credit.
How much does the bond cost?
You pay a yearly premium — a small percent of the bond amount. Good credit means a lower rate.
How a Surety Bond Works
A dealer bond is a type of surety bond. The picture below shows the three parties and what happens if someone files a claim.
Ready to get your Tennessee Motor Vehicle Dealer Bond?
Apply in 2 minutes. Most quotes returned same day.
Start Your ApplicationRelated: All Tennessee surety bonds · What is a surety bond? · How surety bond costs are calculated