(1) Except as otherwise provided in this Chapter or state law, automobile auctions shall be licensed by the Motor Vehicle Commission and shall be wholesale transactions wherein the buyers are licensed motor vehicle or recreational vehicle dealers or their authorized agents. Unlicensed individuals are prohibited from buying automobiles or other motor vehicle or recreational vehicles at automobile auctions unless otherwise exempted. Motor vehicle or recreational vehicle dealers may bring no more than five (5) employees with them to an automobile auction to assist them in the evaluation of automobiles offered for auction and/or the transportation of those automobiles purchased. These employees are not permitted to participate in the auction process (bidding, buying or selling).
(2) The following are minimum requirements for licensed automobile auctions:
(a) Zoning - The automobile auction must have a letter of compliance with local ordinances from the local zoning authority.
(b) Insurance
1. The automobile auction must have garage keepers legal liability insurance in an amount not less than five hundred thousand dollars ($500,000.00); and
2. Check and title insurance approved by the Commission.
(c) Surety Bond - The automobile auction must have a $50,000.00 surety bond issued by a licensed bonding company.
(d) Financial
1. The automobile auction must have a compiled financial statement prepared in accordance with generally accepted accounting principles by a certified public accountant or public accountant dated not earlier than twelve (12) months prior to the date of the application and must furnish a copy of the same to the Commission along with any changes to the statement; and
2. The automobile auction must have a minimum net worth of at least $100,000.00.
(e) Building - The automobile auction lot must have a building suitable for vehicles to pass through for viewing and auctioning purposes, an office space for processing sales and for retention of records, and adequate rest room facilities.
(f) Auction Lot - The automobile auction lot must be graveled or paved and large enough to accommodate parking for 100 vehicles.
(g) Fence - The auction building and lot must be fenced to keep out unauthorized people (e.g. chain link fence).
(h) Employee at Entrance - An employee must be at entrances at least one hour prior to the auction sale and on station until the auction is completed to check for dealer/salesman licensing credentials. In the alternative, subject to the Commission's approval, a licensed automobile auction may establish a registration procedure by which licensure and other credentials are verified and identification cards issued which are checked at the entrance to the auction.
(i) Telephone - The automobile auction must have a business telephone in the auction company name. Cellular telephones are not acceptable.
(j) Sign - All signs must be visible, and a permanent professional business sign must be installed and must have letters which are at least 8 inches tall.
(k) Business Tax - The automobile auction must hold a current business tax license as required by local applicable law.
(l) The automobile auction must obtain and have displayed on its premises a valid auto auction license from the Motor Vehicle Commission.
(m) The automobile auction must obtain and have displayed on its premises a valid principal auctioneer license from the Tennessee Auctioneer Commission.


Tenn. Comp. R. & Regs. 0960-01-.16
Original rule filed November 15, 2000; effective January 30, 2001. Amendment filed August 20, 2008; effective November 3, 2008. Amendments filed September 21, 2016; effective December 20, 2016. Amendments filed January 20, 2022; effective 4/20/2022.

Authority: T.C.A. ยงยง 55-17-107, 55-17-109, 55-17-111, and 55-17-402.

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