Motor Vehicle Dealer Bond in Tennessee

What this bond requires in Tennessee

Tennessee requires a $50,000 corporate surety bond for motor vehicle and recreational vehicle dealers, established under T.C.A. Title 55, Chapter 17 and administered by the Tennessee Motor Vehicle Commission. Per the MVC license requirements, the bond must be issued for two consecutive years, beginning in the month of expected license issuance and expiring on the last day of the same month two years later. The name on the bond must match the entity being licensed, the address must be the physical location, and a Power of Attorney letter must be attached. Aggregate surety liability is capped at the bond amount under T.C.A. § 55-17-111(g)(2)(B).

Who requires it

The motor vehicle dealer bond is required by the Tennessee Motor Vehicle Commission (Department of Commerce and Insurance) under T.C.A. § 55-17-111.

How to file in Tennessee

Applicants submit the Initial Motor Vehicle Dealer Application through the Tennessee Department of Commerce and Insurance online portal at core.tn.gov, attaching the executed $50,000 corporate surety bond (MVC form IN-1316) signed by the principal owner(s) along with the surety Power of Attorney. The bond and all supporting documentation are filed with the application package to the Tennessee Motor Vehicle Commission, 500 James Robertson Parkway, Davy Crockett Building, 10th Floor, Nashville, TN 37243; the bond must remain continuously in force for the two-year license term and be renewed/replaced before expiration to maintain licensure.

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FAQ

Common questions

Is a motor vehicle dealer bond required in Tennessee?

Yes. Tennessee requires motor vehicle dealer bonds issued by an admitted surety. The required amount is $50,000.

How much is the bond in Tennessee?

The bond amount is $50,000. Your annual premium is a small percentage of that, based on credit and experience.

Who requires the bond?

The bond is required by the Tennessee Motor Vehicle Commission (Department of Commerce and Insurance).

How is the bond filed?

Applicants submit the Initial Motor Vehicle Dealer Application through the Tennessee Department of Commerce and Insurance online portal at core.tn.gov, attaching the executed $50,000 corporate surety bond (MVC form IN-1316) signed by the principal owner(s) along with the surety Power of Attorney. The bond and all supporting documentation are filed with the application package to the Tennessee Motor Vehicle Commission, 500 James Robertson Parkway, Davy Crockett Building, 10th Floor, Nashville, TN 37243; the bond must remain continuously in force for the two-year license term and be renewed/replaced before expiration to maintain licensure.

What does the bond cover?

Surety bonds protect the obligee, not the principal. If you fail to meet the obligation the bond guarantees, the surety pays the claim and recovers from you.

Is a surety bond the same as insurance?

No. Insurance protects you. A surety bond protects whoever required the bond. You repay the surety for any claim they pay.