If you are operating a recreational vehicles dealership in Tennessee, a new bill that was just signed into law will govern your trade as of 2017. Senate Bill 1980, which amends Tennessee Code Annotated, Title 55, stipulates new rules for Tennessee RV dealers, including new licensing requirements.
The purpose of the bill is to separate the way the RV dealerships are regulated from the laws for the rest of auto dealers. The reason for these changes is that the business models for RV dealers and other motor vehicle dealers are different, and the new law accounts for these differences.
One of the main licensing requirements, obtaining a Tennessee auto dealer bond, is also applied to RV dealers. They need to obtain a $50,000 surety bond or certificate of deposit in the same amount.
Licensing changes introduced with SB 1980
The new bill, also known as the Tennessee RV Franchise Act of 2016, was signed by Governor Bill Haslam on April 12. The state thus is the 18th U.S. state to have RV specific franchise law.
The legislation was negotiated and agreed on by the Tennessee Motor Vehicle Commission, The Tennessee Automotive Association, the RV Industry Association and local RV dealers.
Until now, there was no licensing process specifically for Tennessee RV dealers. With the new bill, RV manufacturers, dealers, sales staff and factory representatives are required to get licensed. For conducting more than one of these functions or having more than one location of business, you would need an individual license for each. The RV licenses will be active for two years and need to be renewed afterwards.
The new licensing rules are stipulated in Section 10 of the bill and come into effect on July 1, 2017. The rest of the legislation will be in force as of January 1, 2017.
The auto dealer bond for Tennessee RV dealers
With the new bill, RV dealers will need to post a $50,000 auto dealer bond, just like the rest of motor vehicle dealers in the state. The bond should be presented to the Tennessee Motor Vehicle Commission during the licensing.
The goal of the bond is to protect the interests of RV dealers’ customers. An affected party can file a claim to the RV bond and demand reimbursement in the following cases:
- If a RV dealer does not cover the costs of prepaid titles, registration and any other relevant taxes and fees;
- If a RV dealer does not provide to the buyer a valid RV title certificate, free of any claims and liens.
In this sense, the new bond requirement for RV dealers provides an extra layer of safety for recreational vehicle customers. For proven claims, the surety that has underwritten the bond covers the costs initially, but the RV seller needs to fully reimburse the surety afterwards.
The bond names the Tennessee Motor Vehicle Commission as the beneficiary. It needs to be active during the licensing period of the Tennessee RV dealer. This means that it needs to be renewed together with the license renewal.
Getting a better bond price
Meeting the new security requirement does not need to be a challenge for Tennessee RV dealers. Your surety bond price is different from the bond amount that you are required to post, which is $50,000 in this case.
Your bond premium is only a percentage of the bond amount, which is typically between 1%-3% for standard bonding applicants. The exact price is based on your personal and business finances, including your personal credit score.
Bryant Surety Bonds’ experts are here to help, so for any questions you might have, call us at 866.450.3412.
Your choice of a surety agency is also important. With Bryant Surety Bonds, you get top bonding rates, plus your bonding is backed by the most prestigious A-rated, T-listed surety companies.
Getting your Tennessee RV dealer bond
In case you have to obtain a Tennessee RV dealer bond, you can count on us! Just apply online through our easy online form.