Dealer Bulletin Auto Auctions & Licensed Dealers

We are reaching out to remind you a licensed auto auction which also maintains a motor vehicle dealer license, must have a duly licensed salesperson associated with the motor vehicle dealer license whether or not they function as a traditional dealership. Any licensed motor vehicle dealer, no matter their business structure or how they are associated with their licensed auto auction, must comply with all statutes and rules which govern a motor vehicle dealer license. It is the licensees’ responsibility to understand and follow the rules and statutes which regulate their license(s). The Commission thought it would be helpful to offer this reminder, but should you have questions or need assistance, please review our laws and rules by visiting Rules and Laws for Tennessee Motor Vehicle Commission.

TENN. CODE ANN. § 55-17-109 states, in pertinent part:

(a)(1) It is unlawful for any person to engage in business as, or serve in the capacity of, or act as a manufacturer, distributor, factory branch, distributor branch, factory representative, distributor representative, motor vehicle dealer, motor vehicle salesperson or automobile auction without first obtaining a license as required in this part.

TENN. CODE ANN. § 55-17-110 states, in pertinent part:

(a) Any person engaging, acting or serving in more than one (1) of the activities for which a license is required under § 55-17-109 or having more than one (1) location where the business is carried on or conducted, is required to obtain and hold a separate, current license for each activity in which the person is engaged for each location.

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(c)  No motor vehicle dealer or recreational vehicle dealer as defined in § 55-17-401 shall hire any person for the purpose of selling motor vehicles or recreational vehicles, or for acting in the capacity of a motor vehicle salesperson, without first determining that the person is duly licensed as a motor vehicle salesperson.

(d)  No motor vehicle salesperson shall sell or attempt to sell any motor vehicle or recreational vehicle for any motor vehicle dealer or recreational vehicle dealer, unless the motor vehicle salesperson is employed by the motor vehicle dealer or recreational vehicle dealer having an interest in the sale of the motor vehicle or recreational vehicle.

(e)  No person licensed under this section shall give, pay or in any manner compensate any other person for services rendered as a motor vehicle salesperson without first engaging or employing the person in the capacity of a motor vehicle salesperson.

TENN. CODE ANN. § 55-17-114(b)(1)(G) states:

(b)(1) In addition to the grounds contained in subsection (a), the commission may deny an application for a license or revoke or suspend the license of a motor vehicle dealer or salesperson who:

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(G) Employs any person who has not been licensed as a salesperson pursuant to this part[.]