Tennessee tells you what the ground under the cars has to be.

Most states describe the building and go quiet about the lot. Tennessee does the opposite. Its rules name the surfacing material, count the cars it has to hold, add three spaces for customers, and then rule out the cheapest surface there is.

It is also the only state covered here that will not let you run the place alone. A Tennessee dealership has to employ a licensed salesperson.

Everything below comes from Chapter 0960-01 of the Commission's rules, the Commission's licensing page and the statute, cited by rule or section. Where Tennessee publishes two different figures, both are here.

The lot, in the state's own words

Rule 0960-01-.21(4) requires immediate and contiguous access to, and exclusive dedicated use of, a display lot.

• Room for 15 vehicles of the dealership's product line
• Compacted gravel, chert, stone or similar materials. The Commission's licensing page puts the exclusion plainly: not grass
• No public lands, no unimproved land, no residential driveways
• Three parking spots dedicated to customer parking, on top of the 15
• Exclusively the dealership's. Not shared with another business

Chert is a detail worth pausing on. It is a local limestone gravel, and naming it in a statewide rule is the sort of specificity that tells you an inspector has stood on a muddy lot and written it down.

The building

Eight inches is the tallest published lettering of any state here. North Carolina asks for three, Texas, Ohio and Georgia for six. The sign may not advertise any other business or product, and the Commission's page adds that banners are temporary and do not satisfy the requirement.

The telephone number has to be posted on the door, in a window or on the sign, and the line has to be listed in the local directory under the dealership's name. For auctions the rules go further and state that cellular telephones are not acceptable. The dealer rule does not repeat that, so this page does not either.

Sharing a building, which Tennessee almost forbids

Rule 0960-01-.21(1) opens by saying the facility must be physically separate and apart from any other business. Then it sets the only terms on which the two may touch:

• A permanent floor-to-ceiling wall between them
• A separate outside entrance and exit for the dealership
• Any conjoining door secured and locked from the interior, used by employees only and not accessible to the public

The Commission's licensing page describes a second business on the premises in softer terms, allowing one if 66 per cent of the space is used for vehicle sales and service and that business produces less than 33 per cent of the dealership's income, with separate records. The rule and the page are not saying quite the same thing. If you are planning to share a building, that gap is worth a phone call to the Commission before you sign anything.

The hours, which Tennessee defines

Rule 0960-01-.10 requires the dealership to be open during reasonable business hours, posted on the door, in a window or on the sign, and then does something most states do not: it says what reasonable means.

• At least three days a week
• A minimum of twelve hours in total across the week
• Between 8am and 7pm
• At least eight of those hours on Monday through Friday

Twelve hours a week is modest next to Michigan's thirty for forty-eight weeks. It is still twelve hours of somebody being present, and it is written down, which means it can be checked.

The salesperson you have to employ

This is the requirement that has no equivalent in the other states on this site. The Commission states that a dealer is required to employ at least one licensed motor vehicle salesperson in order to conduct business.

• $35 for the salesperson licence, under Rule 0960-01-.14(1)(e)
• $35 for an employer's application to endorse a change of employer
• One dealer at a time. Rule 0960-01-.26(3) states an individual may not hold a salesperson licence for more than one dealer
• Trainee status while the application is pending, under supervision of a licensed salesperson, unless the person has been denied, suspended or revoked
• Return the licence to the Commission when a salesperson is terminated

One honest gap: the sources read for this page do not say whether an owner may hold that salesperson licence themselves. If you are a one-person operation, that is the question to ask the Commission first, because the answer decides whether this line is $35 or a wage.

The money

Two figures here are unusual enough to call out.

Tennessee is one of only two states covered here that makes you prove a net worth. Rule 0960-01-.08(3) requires a financial statement compiled by a CPA or public accountant under GAAP, dated no earlier than twelve months before the application, showing at least $10,000. Ohio sets the same test at $75,000.

And Tennessee is the only one that publishes an insurance figure. Rule 0960-01-.15(1) requires garage liability of at least $300,000 per occurrence, and the Commission's page wants the certificate marked Garage Liability or Any Auto, naming the full licensed entity and its physical address, with coverage running for the life of the licence. Every other state here points at a statute and leaves the number out.

One more that goes the other way, and in the applicant's favour: under §55-17-111(c), if the application is denied or the licence is not issued, 75 per cent of the licence fee is refunded. Florida, Georgia and Arizona all take their application fee and keep it.

The fee conflict is real and this page will not resolve it for you. Rule 0960-01-.14 in the January 2020 revision says $400 biennially. The Commission's current page says $600 to apply. A September 2025 revision of the rules exists but would not load, so the honest answer is to budget $600 and confirm with the Commission.

The bond

$50,000, under §55-17-111(g)(1) and the bond form IN-1316. What makes Tennessee's version different:

• A letter of credit is expressly not acceptable as evidence of the bond. Florida allows one. Tennessee does not
• A certificate of deposit may be, at the Commission's discretion, with a face value equal to the bond, deposited with a designated state depository. Interest stays with the dealer
• Sixty days' notice from the surety before cancellation
• Two years to sue. No action to enforce liability on the bond may be brought more than two years after the event
• Claims, modifications and payments must be reported to the Commission within seven calendar days

The bond covers the same two things as Arizona's: unpaid customer title and registration fees or taxes, and failure to deliver a clean title free of prior owners' interests and liens the buyer did not assume in writing.

What the application needs

• Zoning approval in writing from the local authority, naming the address and stating vehicle sales are a permitted use, or a statement from an official where no zoning applies
• A current County Clerk business tax licence, Class 2, exactly matching the licensed entity name including any d/b/a
• A current Sales and Use Tax Certificate from the Department of Revenue
• Every officer or member owning more than 5 per cent, with percentages, plus managing partner and registered agent
• A floor plan form naming who finances the inventory, updated within 30 days of any change
• A service agreement on Commission forms with a repair garage within a reasonable distance, if there is no repair facility on site, maintained for the life of the licence
• Photographs: the whole display lot, the sign, the posted hours and days, the phone number, the office, the restroom, and street views showing the full building with every entrance and exit
• Felony disclosure, with the court's final judgment, probation or parole release documents and any expungement order, for any owner, officer or director

Note what is not on that list. Chapter 0960-01 contains no pre-licensing course, no examination, no continuing education and no fingerprint requirement at all. Florida asks for sixteen hours, North Carolina twelve, Texas and Ohio six each. Tennessee asks for none, and instead asks an accountant to vouch for you.

Timing, and the ninety-day cliff

• Documents first, inspection second. All documentation goes in before the on-site facility inspection, and final eligibility is decided after both
• Fourteen business days from approval to the licence being issued
• Ninety days to complete the file. Miss it and the process restarts with new fees, and Rule 0960-01-.14(1)(o) forfeits 25 per cent of the fees already paid
• Thirty days to report any change of address, ownership, employment, trade name or franchised line-make
• A separate licence for each place of business, displayed prominently there, and no licence is transferable

Record retention is the one place Tennessee declines to give a number. Rule 0960-01-.11(3) says records are kept for the period required by state or federal law, which is a rule pointing at other rules. Books, records, memoranda and dead files have to be available for inspection during normal business hours, proof of ownership and consignment agreements stay at the dealership, and the temporary tag log stays at the location the tags were issued to.

Civil penalties run from $100 to $5,000 per day or per act of violation, under Rule 0960-01-.13(1).

What this actually costs before the first car

Tennessee's published entry cost is among the highest here: $600 to apply, a $50,000 bond, $300,000 of garage liability, a CPA to compile a statement, and $35 for the person who is allowed to do the selling.

The unpublished cost is the lot. Fifteen cars plus three customer spaces, surfaced in compacted gravel, exclusively yours, contiguous with a 288 square foot building that has a working restroom in it. That is a lease, and it runs every month whether you sell a car or not.

None of it attaches to a car, which is precisely why it vanishes from the mental arithmetic and reappears at the end of the year. The costs that do attach to a car are the ones nobody writes down: the transport, the detail, the two tyres, the title work, the month it sat on that gravel. Deelary keeps every one of them on the vehicle it belongs to, so the total cost, the margin and the days in stock on screen are the real ones. What a good gross profit per car looks like is the figure to measure yours against.

Comparing states? Dealer license requirements by state puts the bond, the office, the sign and the course side by side. Texas measures the ceiling, Florida inspects before you file, California gives you an exam you can fail, North Carolina rations your plates, Ohio counts the chairs, Michigan counts your hours, Arizona lets the lot be a vacant lot, Georgia denies the five-car rule outright, and Pennsylvania measures the lot in cars with their doors open. Do you need a dealer license to flip cars covers the threshold question across states.