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How to get a used car dealer license in Tennessee

You apply online through CORE to the Tennessee Motor Vehicle Commission for a Motor Vehicle Dealer license. Plan for a $50,000 two-year bond, a CPA-compiled statement showing $10,000 net worth, a 288 square foot office, a 15-vehicle lot and an on-site inspection.

  • Sourced to Motor Vehicle Commission
  • Checked October 2026
  • Free
License
Motor Vehicle Dealer license
Surety bond
$50,000
State fee
$600
Pre-license course
None required
Background check
Felony disclosure with court records
License term
2 years, $600 renewal
What the state asks for

Tennessee dealer license requirements

The figures a first-time used car dealer needs before applying to Motor Vehicle Commission. Each row shows how well it is supported.

Surety bond
$50,000Official source

A corporate surety bond signed by the principal owners, with a power of attorney letter. It must run two consecutive years, starting in the month you expect the license and ending on the last day of that month two years later.

State license fee
$600Official source

The initial application fee for the two-year dealer license, paid in CORE. Each salesperson license is $50. A re-inspection caused by the applicant costs $400.

Pre-license education
None requiredOfficial source

The Commission's licensing requirements for dealers and salespeople list no course or exam. Eligibility is decided after the on-site inspection and document review.

Background check
Felony disclosure with court recordsOfficial source

If any owner, officer or director has a felony conviction, you file the court's final judgment and proof of release from probation or parole. The Commission's requirements do not mention fingerprints.

Insurance
$300,000 garage liabilityOfficial source

A certificate of liability insurance for at least $300,000 per occurrence, showing Garage Liability or Any Auto, in the exact name and physical address of the dealership. Coverage must last for the life of the license.

Business location
288 sq ft office, 15-vehicle lotOfficial source

A permanent building of at least 288 square feet with a working restroom, a dedicated display lot for 15 vehicles on compacted gravel or similar, and three customer parking spots. No residences or temporary facilities.

License term and renewal
2 years, $600 renewalOfficial source

The license is biennial. Renew in CORE before the expiration date with a new two-year bond and $600. A late renewal adds a $300 late fee, and after 90 days you must reapply as a new applicant.

Sales allowed without a license
5 in 12 monthsOfficial source

An individual may sell up to five used vehicles registered and titled in their own name within 12 months without a dealer license. People living together in one household count as one individual.

Processing time
14 business days after approvalOfficial source

The Commission says licenses are issued within 14 business days of approval. Approval follows the on-site inspection and document review, and you have 90 days to complete your documents.

“Official source” means the state agency’s own page, form or law. Where the state’s sources did not settle a point, the row says so instead of showing a guess.

Who issues the license

Tennessee Motor Vehicle Commission, Department of Commerce and Insurance

License you apply for

Motor Vehicle Dealer license

Official licensing page

The 90-day deadline costs money

The Commission's website says that if your documents are not complete within 90 days, the process restarts with new fees. Its rule says 25% of the application fee is forfeited. Either way, file a complete package. The rule also requires the dealership to be physically separate from any other business. The website allows one added business only if 66% of the space is used for vehicle sales and service.
Step by step

How to get a Tennessee dealer license

The order that works for a first application. Tick each step off as you finish it.

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  1. Get the CPA statement and tax accounts

    Have a CPA prepare a compiled financial statement in the business name showing a net worth of at least $10,000. It must follow GAAP and be dated within 12 months of your application. Get a Class 2 business tax license from the County Clerk and a Sales and Use Tax Certificate from the Department of Revenue, both in the exact name of the business.

    Net worth: $10,000 minimum

  2. Get zoning approval for the site

    Get written approval from the local zoning authority. The letter must show the address and state that automobile sales are a permitted use. If no zoning restrictions exist, get a statement from a county or municipal official confirming that.

    Rule 0960-01-.07

  3. Set up the building, lot and sign

    You need a permanent building of at least 288 square feet with a restroom, a dedicated lot for 15 vehicles, three customer parking spots and a permanent sign with eight-inch letters. Post your hours and phone number. Take digital photos of the whole lot, the sign, the posted hours and phone number, the office, the restroom and the street view for the application.

    Rule 0960-01-.21

  4. Arrange service and a licensed salesperson

    If there is no repair facility on site, sign a service agreement with an operating repair garage within a reasonable distance. A dealership must employ at least one licensed salesperson to do business. Each salesperson applies through their own CORE account and pays $50.

    Salesperson license: $50

  5. Buy the bond and garage liability insurance

    Get a $50,000 corporate surety bond for two consecutive years with a power of attorney letter. Get a certificate of liability insurance for at least $300,000 per occurrence that shows Garage Liability or Any Auto. The name and address on both must match the business exactly.

    $50,000 bond, $300,000 liability

  6. Apply in CORE and pay $600

    Complete the Initial Motor Vehicle Dealer Application at core.tn.gov and pay the $600 fee. Upload the corporate documents, list every owner of more than 5%, name any floor plan lender, and add court records for any felony conviction. Complete all documents within 90 days of applying.

    core.tn.gov, $600 fee

  7. Pass the on-site inspection

    Submit every document before the on-site facility inspection. The Commission decides eligibility after the inspection and document review, then issues the license within 14 business days of approval. A re-inspection caused by something you did or failed to do costs $400.

    Issued within 14 business days

Practical advice

Measure the building and lot against the 288 square foot, 15-vehicle and three-space standards before you agree on rent, and confirm the lot is not shared with another business. Order the CPA statement early, but keep it inside the 12-month window. Have every document ready before you pay in CORE, because the 90-day clock starts when the Commission receives your application.

Before you apply

Seven things to settle before any state application: the business, the owners, the money and the property.

Read the startup playbook
The lot and the office

Tennessee dealer location requirements

What the state checks at the business address.

  • A permanent building of at least 288 square feet with a working restroom. No residences, tents or temporary stands, and modular units must be underpinned.
  • A display lot for the dealership's exclusive use that holds 15 vehicles, surfaced with compacted gravel, chert, stone or similar. Grass does not qualify.
  • At least three parking spots set aside for customers.
  • A permanent sign with letters at least eight inches high showing the business name, visible from the road. Banners do not count.
  • Open at least three days and 12 hours a week between 8 a.m. and 7 p.m., with at least 8 of those hours on weekdays, and the hours posted.
  • A primary phone number listed under the dealership's name and posted on the door, in a window or on the sign.
  • An on-site repair facility, or a service agreement with an operating repair garage within a reasonable distance.

Zoning comes first

A site that meets the state’s rules can still fail local zoning. Get written approval for vehicle sales from the city or county, and ask the landlord for a lease that depends on the license being issued, before you sign.
Once you are licensed

Keeping a Tennessee dealer license

Renewal and ongoing duties

Renew in CORE before the license expires with a new two-year bond and the $600 fee. A late renewal adds $300, and after 90 days you must reapply. Keep garage liability coverage active and at least one licensed salesperson on staff. File the Annual Sales Report in CORE by February 15. Report a change of repair garage or floor plan lender within 30 days.

Federal rules that apply here too

  • The FTC Buyers Guide, posted on every used vehicle you offer for sale.
  • The FTC Safeguards Rule: a written plan for protecting customer financial information.
  • IRS Form 8300 when a customer pays more than $10,000 in cash.
  • A federal odometer disclosure on each transfer.
How each federal rule works
FAQ

Tennessee dealer license FAQ

The questions first-time dealers ask most.

How do I get a used car dealer license in Tennessee?

Apply online in CORE to the Tennessee Motor Vehicle Commission. You need a qualifying location, zoning approval, a business tax license, a sales tax certificate, a CPA-compiled financial statement showing $10,000 net worth, a $50,000 two-year bond, $300,000 in garage liability insurance and at least one licensed salesperson. Pay the $600 fee and pass the on-site inspection.

How much is the dealer bond in Tennessee?

$50,000. It is a corporate surety bond signed by the principal owners and issued for two consecutive years, starting in the month you expect the license. At renewal you file a new two-year bond that begins and ends on the license expiration date.

How much does a Tennessee dealer license cost?

The initial application fee is $600 for a two-year license, and renewal is also $600. Each salesperson license is $50. You also pay for the bond, garage liability insurance, the CPA statement and your local business tax license. A re-inspection caused by the applicant costs $400.

Do I need a pre-licensing course in Tennessee?

No. The Motor Vehicle Commission's licensing requirements for dealers and salespeople do not include a pre-licensing course or exam. Eligibility is decided after the on-site inspection and document review.

Can I get a Tennessee dealer license without a car lot?

No. You need a permanent building of at least 288 square feet with a restroom, a dedicated display lot that holds 15 vehicles and three customer parking spots. Residences and temporary facilities are not allowed, and the lot cannot be shared with another business.

How many cars can I sell in Tennessee without a dealer license?

Five. An individual may sell or offer up to five used vehicles registered and titled in their own name within a 12-month period without a dealer license. More than five requires a license, and people living together in one household count as one individual. Selling vehicles titled in someone else's name is prohibited.

Sources

Checked October 2026. This is general information, not legal, tax or insurance advice. Fees, bond amounts and forms change, and local zoning rules vary. Confirm current requirements with Motor Vehicle Commission or your attorney before you sign a lease or pay a fee.

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