Dealer Surety Bond in Tennessee: $10,000–$100,000 Requirement
Tennessee requires all licensed dealers to maintain a $10,000–$100,000 surety bond. Here is exactly what you need, what it costs, and what happens when a claim is filed.
Bond Requirement at a Glance
Amount varies by state and dealer license category. Contact your state DMV for the exact requirement.
Who Needs a Surety Bond in Tennessee
Most states require a surety bond as a condition of obtaining and maintaining a dealer license.
- New vehicle dealer
- Used vehicle dealer
- Wholesale dealer
- Motorcycle dealer
How to Get a Bond in Tennessee
Where to get it: Any state-licensed surety company
Use the state DMV-approved bond form. File with your dealer license application.
Annual Premium Cost
0.5%–3% of bond face value per year
Premium is based on your personal credit score. Good credit = lower annual cost.
How Claims Work
Injured buyer files with state DMV or directly with the surety company.
Valid claims are paid up to the bond face value. Dealer must reimburse the surety for any paid claims.
Penalties for Operating Without a Bond
Tennessee-Specific Note
Tennessee-Specific Facts for Dealer Surety Bond
Tennessee Vehicle transfer fees and requirements
In Tennessee, the title transfer fee is $11 and registration costs $26.50 per year. Vehicle sales are subject to 7% state sales tax plus local taxes (can total 9.75%). Tennessee does not require notarization for private-party vehicle transfers. Emission testing is required in Tennessee — verify the vehicle passes before completing the sale.
- Emissions testing required in Davidson, Hamilton, Rutherford, Sumner, Williamson, and Wilson counties
- Title transfer at county clerk office
- Sales tax based on county of purchase
Tennessee sales tax on vehicle purchases
Tennessee has a 7% state sales tax rate. 7% state plus local taxes (total up to 9.75%). Private-party vehicle sales in Tennessee are subject to sales tax. Sales tax applies to private party vehicle purchases. The title transfer fee is $11.
Tennessee bill of sale statistics
BillOfSaleNow has generated 1,712 bill of sale documents for Tennessee transactions, with 46 generated this month alone. The most popular vehicle type is car.
More Tennessee Vehicle Guides
- Car Loan Refinance in Tennessee
- Car Recall Process in Tennessee
- Car Title Transfer Fees in Tennessee
- Car Totaled Insurance Payout in Tennessee
- Cash for Cars / Junk in Tennessee
- Certified Pre-Owned Rules in Tennessee
Each guide is written specifically for Tennessee laws, agencies, and procedures. Bookmark for future reference.
Frequently Asked Questions
How much is a dealer surety bond in Tennessee?
Tennessee requires a $10,000–$100,000 surety bond for licensed dealers. Amount varies by state and dealer license category. Contact your state DMV for the exact requirement.
Who requires a dealer surety bond in Tennessee?
State DMV or Motor Vehicle Division requires the bond. Most states require a surety bond as a condition of obtaining and maintaining a dealer license.
How much does a dealer surety bond cost annually in Tennessee?
Expect to pay 0.5%–3% of bond face value per year. Premium is based on your personal credit score. Good credit = lower annual cost.
What happens if a Tennessee dealer doesn't have a surety bond?
Dealer license denial, suspension, or revocation. Possible criminal charges for operating without a bond.
How does a surety bond claim work in Tennessee?
Injured buyer files with state DMV or directly with the surety company. Valid claims are paid up to the bond face value. Dealer must reimburse the surety for any paid claims.
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Generate Bill of SaleSource: State DMV Dealer Licensing Division. Verify current bond amounts with your state DMV before purchasing.