The Tennessee bond limit required for the auto industry is $50,000. This limit applies to motor vehicle dealers, mobility vehicle dealers, recreational vehicle dealers, and motor vehicle auctions.
Bonds apply to singular locations. If you have multiple dealerships, you will need to have a separate bond for each location of business.
Several factors are used to determine the cost for your dealer bond. The number of years in business and dealer’s personal credit score are just a couple of the ways the price is calculated.
Regardless of your license type, Jet searches to find you the lowest rates for your bond. Our rate starts at a monthly payment of $14, providing you with the lowest cost due up front. If you prefer to pay in full, our rate starts at $275 for the two-year bond.
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Apart from being a mandatory requirement, a bond is valuable tool for dealers. Bonding begins with a dealer obtaining a bond from a surety company. The amount of coverage required by Tennessee law is $50,000, but receiving that full amount of coverage through a bond costs only a fraction of the price.
Once the bond is in effect, the dealer will not have to pay additional costs during licensure if they follow the standards set by Tennessee law.
However, if there is dealer misconduct and a claim is filed, the bond ensures that the customer will receive payment for their monetary loss. The dealer will then have to pay back the surety the amount of the claim.
To ensure you are covered, let Jet help simplify the process. Complete the quick application by clicking below.
$25,000 Motor Vehicle Dealer Bond
Tennessee law protects consumers from dealers who withhold payment taxes or fees relating the customer’s title, registration, or other fees. It also protects against dealers who do not supply a title that is void of any prior owner’s interests or liens.
Such claims against a dealer would prove valid and lead to a payout of the bond if the customer follows complaint procedure.
Tennessee dealer bonds are linked with the dealer license. Bonds are valid for a period of two years, starting from the month when you receive your license. On the last day of that same month two years later, your bond will expire.
If your bond expires or gets cancelled by the surety, you are responsible for finding coverage by providing a rider, a continuation certificate, or a new bond. If there is a break in bond coverage, you are not allowed to conduct business during that time.
Surety companies typically do a continuous bond which means as long as payment is provided upon renewal, your bond will stay in effect.
Read more details about the requirements here.
Tennessee dealer licenses and dealer bonds have a cohesive term of two years. When nearing expiration, the dealer will receive a notice 45 days before their license expires. During renewal, a license renewal fee and insurance for the new period must be sent in. If you turn your renewal in late, you will have to pay a penalty of 50% of the license fee.