Tennessee Dealer License Guide | Wayne Reaves Software

Before You Begin

This guide is a general orientation only. It is not legal, financial, tax, or licensing advice. Requirements, fees, and bond amounts are set by the State of Tennessee and change from time to time.

Always confirm every current requirement directly with the Tennessee Motor Vehicle Commission before you spend money or submit anything.

The authority on this process

Tennessee Motor Vehicle Commission, part of the Department of Commerce and Insurance. 500 James Robertson Parkway, Nashville, TN 37243. Phone 615-741-2711. The Commission publishes its full licensing requirements on its own page — that page is the definitive checklist, and it is updated periodically. The Initial Motor Vehicle Dealer Application is completed online through Tennessee's CORE licensing portal.

The governing law: Tennessee Code Annotated, Title 55, Chapter 17, and the Commission's rules.

tn.gov/commerce — MVC →

Welcome — and congratulations

Opening a dealership is a serious undertaking, and the licensing process is the first real test of it. Tennessee is among the more demanding states in this respect: it sets specific physical standards for the facility and lot, requires a CPA-prepared financial statement, and requires you to have a licensed salesperson employed before the dealership can conduct business.

Wayne Reaves has worked alongside independent dealers for years. We are not a licensing service and we do not file on your behalf — but we have watched a lot of people go through this, and we know what the road looks like. This guide lays out the shape of it so you know what is coming.

We would like to be the software that runs your dealership — and the smart move is to put us in place before you open, not after. While you work through licensing, we can be getting your system, your website, and your training ready, so opening day is a sale, not a setup project.

Do you need a license?: Tennessee sets a threshold on the number of motor vehicles you may sell or offer to sell in a year before a dealer license is required, and the requirement covers RVs and motorcycles as well as cars. If you are near that line, confirm your situation with the Commission rather than guessing.

There is a 90-day clock on your application: Tennessee requires your documentation to be complete within a defined window, and if it is not, the process restarts with new fees. That single rule should shape how you sequence everything below: assemble first, submit second. Do not start the clock until the slow items — the CPA statement, the zoning letter, the bond — are in hand.

The Shape of the Process

Tennessee's requirements fall into these areas. Several take weeks to obtain from third parties, so start those first.

01
Established place of business
a permanent facility and display lot meeting the Commission's specific physical standards.
02
Zoning approval
a written letter from your county or municipality.
03
Business tax license
from your County Clerk, in the exact name of the licensed entity.
04
Financial statement
compiled by a CPA, showing a minimum net worth, with a compilation letter.
05
Corporate documentation
charter or articles, ownership breakdown, and a Certificate of Authority for out-of-state entities.
06
Surety bond
a corporate bond with power of attorney, written for a specific two-year term.
07
Liability insurance
garage liability or any-auto coverage at the required limit, maintained for the life of the license.
08
Service agreement
if you have no repair facility on site.
09
Sales and use tax certificate
from the Department of Revenue.
10
Signage and photographs
meeting specific lettering and content requirements.
11
A licensed salesperson
employed at the dealership.
12
Application, fees, and on-site inspection
through the CORE portal, with final eligibility after both the inspection and document review.

Why we do not list dollar amounts here: Bond amounts, net worth minimums, insurance limits, application fees, square footage, and lot capacity are all set by rule and published by the Commission on its licensing page. They change. Rather than reprint figures that may be out of date by the time you read this, work directly from the Commission's current requirements page and application — it is free, public, and authoritative.

Step 1

Your facility and display lot

Tennessee requires a permanent facility primarily used for selling and servicing motor vehicles. Temporary facilities and private residences are not permitted, and modular units must be properly underpinned. The Commission sets a minimum interior size for the building and requires a functioning restroom.

The display lot must be exclusively for the dealership, must accommodate a specified minimum number of vehicles, must be surfaced with compacted gravel or similar material rather than grass, and generally should not be shared with other businesses. A set number of customer parking spaces is also required.

There is a narrow exception for a second business on the premises. Tennessee permits one additional business at the location if the great majority of the space is devoted to vehicle sales and service, the second business generates only a minor share of income, and records are kept separate. The specific percentages are set by the Commission — if you are contemplating this, confirm them directly and in advance.

Confirm the current dimensions, lot capacity, surfacing, and parking requirements on the Commission's page before you sign a lease or start grading. These are the requirements an inspector will physically verify.

Step 2

Zoning approval

You must provide written approval from your local zoning authority. If your location has no zoning restrictions, you obtain a statement from a county or municipal official confirming that. Either way, the letter must show the address and state that automobile sales are a permitted use.

This comes from your city or county, not from the state, and turnaround varies. Start it early — and start it before you commit to a property.

Step 3

Business tax license

A current business tax license from the County Clerk is required, in the exact name of the entity being licensed, with any d/b/a reflected on it. Tennessee specifies a license classification for dealers; confirm the current classification with the Commission or your County Clerk.

Step 4

Financial statement

Tennessee requires a compiled financial statement prepared in the name of the business, showing a minimum net worth, prepared in accordance with GAAP, and signed by a CPA on their letterhead including their license number. It must be recent relative to your application date. If your CPA is not licensed in Tennessee, a copy of the CPA's license must be furnished.

Start this early. This is the requirement most likely to delay an otherwise ready application. A CPA needs time, and the statement has a shelf life — so it should not be the first thing you commission, but it should not be the last either. Talk to your accountant about timing as soon as you have a target application date.

A separate financial background disclosure is also generally required for owners at or above a threshold ownership percentage. Confirm the current forms and thresholds with the Commission.

Step 5

Corporate documentation

Corporations, LLCs, LLPs, and trusts submit the entity's charter or articles of organization. Out-of-state entities provide a Certificate of Authority to do business in Tennessee.

You must identify officers and members at or above a threshold ownership percentage with their ownership percentages, and identify the managing partner and registered agent. Publicly traded corporations must identify themselves as such.

Which business structure is right for you is a question for an attorney or CPA, not for a software vendor. In Tennessee it also determines which documents you file and whose financial disclosures are required.

Step 6

Surety bond

Tennessee requires a corporate surety bond signed by the principal owner or owners, matching the business name and address exactly, with a power of attorney letter attached.

The bond term is unusually specific. Tennessee requires the bond to be written for two consecutive years, beginning in the month you expect the license to be issued and expiring on the last day of that same month two years later. A bond written for the wrong window will not satisfy the requirement — so coordinate the bond's start date with your expected issuance date rather than buying it on whatever date you happen to apply.

Each branch or additional location generally requires its own bond. Confirm the current required amount, form, and term rules with the Commission or a licensed surety agent before you buy.

Choosing a provider

Wayne Reaves does not sell bonds or insurance, does not recommend a particular agent, and receives nothing if you use one provider over another. Your state association, an independent insurance broker, or a licensed surety agent can help you compare. Get more than one quote — pricing varies considerably based on credit and business history.

Step 7

Liability insurance and service agreement

A certificate of liability insurance is required, indicating garage liability or any-auto coverage at the Commission's minimum per-occurrence limit. It must show the complete name of the licensed entity, the physical address, a policy number, and the policy period — and coverage must continue for the life of the license, not just at application.

If there is no mechanical repair facility at your location, Tennessee requires a service agreement with an operating repair garage within a reasonable distance, maintained throughout the licensing period. Any change in the designated facility must be reported to the Commission within a short window.

Tell your insurance agent specifically that the certificate is for a Tennessee Motor Vehicle Commission dealer license so the coverage type, limits, and certificate holder are correct.

Step 8

Sales and use tax certificate

A copy of your current Sales & Use Tax Certificate from the Tennessee Department of Revenue is required, showing the identification number and the exact name and physical address of the licensed entity. Any d/b/a or assumed name must appear on it.

The single most common delay: Name and address mismatches. Tennessee requires exact matching across the bond, the insurance certificate, the business tax license, the sales tax certificate, the corporate documents, and the application. One abbreviated name or a missing d/b/a can hold up the entire file — and with a fixed completion window running, that matters more here than in most states.

Step 9

Signage and photographs

The Commission sets a minimum lettering height for your sign, which must clearly display the business name, be permanently installed, and be visible from the road. Banners are treated as temporary and do not satisfy the requirement. If you operate a permitted second business at the location, a separate sign may be posted for it.

Photographs are submitted digitally and must include the entire display lot, the business sign, posted hours and days of operation, the phone number, the office, and the restroom facilities — plus street-view photographs showing the full building with all entrances and exits.

Read the current photograph list carefully before you shoot. Missing photos are an easy and avoidable reason for a file to come back.

Step 10

Salesperson, franchised dealers, and floor plan

Licensed salesperson: a Tennessee dealership must employ at least one licensed motor vehicle salesperson in order to conduct business. If you are the owner and intend to sell, that generally means you need the salesperson license too. This is a separate application — plan for it alongside the dealer license rather than after.

Franchised dealers: franchise applicants provide a manufacturer or distributor letter of acknowledgment identifying the specific line-makes and the relevant market area, plus a sworn statement of retail and warranty labor rates. Changes in labor rates must be reported to the Commission within a short window.

Floor plan financiers: if you use inventory financing, the names of your floor planners must be kept current with the Commission, with changes reported within a defined period. This is an ongoing obligation, not a one-time filing.

Step 11

Conviction records

If any owner, officer, or director has a felony conviction, Tennessee requires the final judgment or disposition order from the court in the jurisdiction of conviction, showing how the matter was resolved, the disposition date, and the judge's signature, along with documentation of any probation or parole release requirements.

An expungement order may need to be submitted if the other documentation does not show the conviction fully discharged, and a certificate of re-employability, if obtained, should be included.

If you are unsure whether something must be disclosed, disclose it — or ask an attorney. Do not guess and do not omit.

Step 12

Application, fees, and inspection

The Initial Motor Vehicle Dealer Application is completed online through the CORE portal. All documentation is submitted before the on-site facility inspection, and final eligibility is determined after both the inspection and the document review.

If your documentation is not complete within the Commission's window, the process restarts with new fees, and if requirements are unmet, re-application and inspection fees apply. Licenses are issued within a short period after approval.

Renewal: Tennessee dealer licenses run on a multi-year cycle, and several requirements — insurance, the service agreement, floor plan disclosures — are continuing obligations rather than one-time submissions. Confirm your renewal date and ongoing requirements with the Commission the day your license is issued.

Federal obligations start on day one: State licensing is not the whole picture. Federal rules apply the moment you begin selling — the FTC's Used Car Rule requires a Buyers Guide displayed on every used vehicle offered for sale, and other federal requirements apply to advertising, financing, and recordkeeping. These are enforced by agencies with no connection to the Motor Vehicle Commission. Ask your attorney or your state association what applies to your operation. See our federal compliance links.

How Wayne Reaves Fits In

We want to be straightforward about what we do and do not do.

What we do not do

We do not file applications, form business entities, sell bonds or insurance, provide legal or tax advice, or interpret state requirements on your behalf. Those belong with the Motor Vehicle Commission, your attorney, your CPA, and licensed agents. We receive no compensation or referral fee from bond or insurance providers.

What we do

We build dealer management software and dealer websites for independent dealers — inventory, deal tracking, customer records, reporting, compliance tools, and a website that puts your inventory in front of buyers.

One practical note: Tennessee requires separate records if you run a permitted second business on the premises, and requires floor plan financier information to be kept current. How you handle records is worth thinking about before your first sale rather than after.

Get set up before you open

The best time to choose your software is now — while you are still getting licensed. Notice how much of this process is really about how your dealership will keep records: titles, deal files, tax paperwork, books kept at your location. That is exactly what Wayne Reaves handles from day one. Dealers who get set up with us during licensing open their doors ready — inventory loaded, forms and deal paperwork in place, recordkeeping organized the way inspectors and auditors expect, and a website already live when the first customer searches for you.

Sign up while your application is in motion and we will have your system configured, your team trained, and your website built by the time the license is issued — so your first sale runs like your hundredth. We have been helping independent dealers open and grow since 1987, and getting started is simple: request a demo or call us, and we will walk you through it.

Get Started with Wayne Reaves Call 800-701-8082

Where to Get Answers

Question about…	Ask
The full current requirements checklist	Tennessee Motor Vehicle Commission · tn.gov/commerce · 615-741-2711
Applying and paying fees	The CORE licensing portal
Facility, lot, and signage specifics	The Commission — before you sign a lease
Current bond amount, form, and term dates	The Commission or a licensed surety agent
Financial statement and net worth requirement	Your CPA, working from the Commission's current requirement
Zoning approval letter	Your city or county
Business tax license and classification	Your County Clerk
Sales and use tax certificate	Tennessee Department of Revenue
Entity formation and Certificate of Authority	An attorney or CPA; Tennessee Secretary of State
Salesperson license	Tennessee Motor Vehicle Commission
Liability insurance	A licensed insurance agent
Federal advertising, Buyers Guide, and financing rules	An attorney or your state association
Dealer software and websites	Wayne Reaves Computer Systems Inc.

Disclaimer

This guide is provided by Wayne Reaves Computer Systems Inc. as a general informational overview only. It is not legal, tax, financial, insurance, or licensing advice, and it does not create any professional or advisory relationship. Licensing requirements are established and administered solely by the State of Tennessee and are subject to change without notice. Wayne Reaves Computer Systems Inc. makes no representation or warranty as to the accuracy, completeness, or currency of the information here, and accepts no liability for any action taken in reliance on it. Verify all requirements directly with the Tennessee Motor Vehicle Commission and consult qualified professionals before acting.

Reviewed July 2026. Reviewed quarterly.