How Much Does a Tennessee Auto Dealer Bond Cost?
Anyone seeking to obtain a Tennessee auto dealer license is required to provide a Corporate Surety Bond of at least $50,000. This bond must have a duration of two consecutive years, beginning in the month when the license is expected to be issued and concluding on the last day of the same month, two years later.
You are not obligated to cover the entire sum. Instead, you contribute a portion of the bond, usually falling within the range of 1% to 10%. The specific rate you pay is influenced, to some extent, by your business finances, but your personal credit holds the greatest significance in determining this rate. With a stellar credit score and no previous claims, you may be able to obtain your Tennessee auto dealer bond for as little as $500.
How Do I Get a Tennessee Auto Dealer Bond?
Starting the procedure to obtain your Tennessee auto dealer bond through the JW Surety Bonds is straightforward – just fill out a brief online application. Following the assessment of your application, you'll be provided with a quote specifying the price of your surety bond. Additionally, you'll receive guidance on the necessary steps to finalize the bond procurement process.
One of our clients, Lisa, expressed interest in running an auto dealership. However, she encountered a situation where her bond premium increased temporarily due to a dip in her credit score. We collaborated closely with Lisa to minimize the rise in her surety bond premium. Remarkably, within a year, her credit score saw a sudden recovery, resulting in a substantial reduction in her bond premium when it came time for renewal. Lisa's experience highlights the ever-changing nature of bond costs and the significant influence of one's credit health.
Who Needs a Tennessee Auto Dealer Bond?
Anyone involved in selling or purchasing motor vehicles for profit is required to obtain a Tennessee auto dealer bond as part of the licensing process. This includes both new and used auto dealers, as well as manufacturers, wholesalers, auctions, and recreational vehicle dealers.
If an individual or business sells more than five motor vehicles within a year in the state, they are mandated to hold a Tennessee motor vehicle dealer license and, as part of the licensing requirements, they must submit a $50,000 surety bond with their application.
Therefore, the need for a Tennessee auto dealer bond applies to anyone engaged in selling more than five vehicles in a year in the state, whether they are in the business of new or used vehicles.
Tennessee Auto Dealer Bond Term and Expiration Date
Tennessee auto dealer bonds are valid for a period of two years, starting from the date they are issued. The duration of an auto dealer bond in Tennessee corresponds with the renewal of the auto dealer license. If a Tennessee auto dealer bond and license are not renewed together, it could lead to potential penalties or fines. Typically, the surety company that issues the auto dealer bond sends out a renewal reminder at least 30 days prior to the expiration date.
What is a Tennessee Auto Dealer Bond?
In Tennessee, as a part of the licensure application process, dealers are required by the Motor Vehicle Commission to post a Motor Vehicle Dealer Bond.The surety bond serves as a financial safeguard in cases where a dealer does not provide a legitimate vehicle certificate of title, or neglects to fulfill their obligation of paying a retail customer's prepaid title, registration, or any associated fees or taxes.
Frequently Asked Questions
Yes. You can get approved for a bond regardless of your credit situation. However, the price will increase. You can apply to get instant approval. As the largest writer of surety bonds in the U.S., we have access to high risk markets that many other agencies do not.