How to Obtain an Auto Dealer License in Memphis Tennessee

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The state of Tennessee heavily regulates automobile dealers and has strict licensing requirements. Obtaining an auto dealer license in Memphis, Tenn., is a multi-step process that will take some time. But it's worthwhile, as having an auto dealer license will grant you access to dealer-only auctions and allow you to establish a new or used automobile dealership.

Things You'll Need

  • Property
  • Sign
  • Surety bond

Find a property suitable to opening a dealership. The property cannot be zoned for residential use and cannot be part of an office suite (must be a separate building). It needs enough lot space to keep at least 15 vehicles in inventory. The indoor office space must total at least 288 square feet. The property also must have restroom accommodations and at least three customer parking spaces.

Prepare your property for business. The state of Tennessee mandates dealer license applicants to display a sign visible from the road with letters measuring no less than 8 inches tall. Establish a telephone connection in the business name and display the number on the sign.

Visit the Shelby County Clerk office to apply for a business tax and sales tax license. Both licenses are required prior to applying for an auto dealer license.

Secure a service agreement with a local mechanic or service center. All licensed Tennessee auto dealers must have an agreement with a service center to service and repair their vehicles. See Resources for the required service agreement form.

Obtain a $50,000 surety insurance bond. The policy must be written for a term of at least two years.

Fill out Tennessee form number IN-0592, application for an auto dealer license. Include a check or money order for $200 made out to "Tennessee Motor Vehicle Commission." Mail the form to the address listed. A state representative will review your application and determine whether or not you have completed the requirements.

Tips & Warnings

  • Tennessee auto dealers must be open at least three days per week and a minimum of 12 hours per week.

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