[Effective Until 10/11/2024]

(a) Notwithstanding this part, when motor vehicles of the state are being sold at an automobile auction sale, no license as a motor vehicle dealer shall be required for any person or participant who purchases or bids on the vehicles of the state. This person shall not participate in the sales of any other motor vehicles without being licensed as required by this part, except as provided in § 55-17-102(1)(C).

Attorney's Note

Under the Tennessee Code, punishments for crimes depend on the classification. In the case of this section:
ClassPrisonFine
class A misdemeanorup to 11 monthsup to $2,500
For details, see Tenn. Code § 40-35-111
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Terms Used In Tennessee Code 55-17-120

  • Automobile auction: means :
    (A) Any person offering motor vehicles for sale to the highest bidder where buyers are licensed motor vehicle dealers or their duly authorized agents. See Tennessee Code 55-17-102
  • Commission: means the motor vehicle commission created by this part. See Tennessee Code 55-17-102
  • Dealer: means every person engaged in the business of buying, selling or exchanging vehicles of a type required to be registered and who has an established place of business for that purpose in this state. See Tennessee Code 55-8-101
  • Department: means the department of revenue. See Tennessee Code 55-1-111
  • Driver: means :
    (A) For purposes of a conventionally operated vehicle, every person who drives or is in actual physical control of a vehicle. See Tennessee Code 55-8-101
  • Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
  • Manufacturer: means any person who manufactures or assembles new and unused motor vehicles or recreational vehicles, or who maintains factory representatives. See Tennessee Code 55-17-102
  • Motor vehicle: means any self-propelled motor-driven vehicle of the type and kind required to be registered and titled under chapter 1 of this title, and includes, but is not limited to, "motor vehicle" as defined in §. See Tennessee Code 55-17-102
  • Motor vehicle dealer: means any person not excluded by subdivision (17), engaged in the business of selling, offering to sell, soliciting or advertising the sale of motor vehicles or used recreational vehicles, or possessing motor vehicles or used recreational vehicles for the purpose of resale, either on that person's own account or on behalf of another, either as that person's primary business or incidental to that person's business. See Tennessee Code 55-17-102
  • Operator: means :
    (A) For purposes of a conventionally operated vehicle, every person, other than a chauffeur, who drives or is in actual physical control of a motor vehicle upon a highway or who is exercising control over or steering a vehicle being towed by a motor vehicle. See Tennessee Code 55-8-101
  • Person: means every natural person, partnership, corporation, association, trust, estate, or any other legal entity. See Tennessee Code 55-17-102
  • Property: includes both personal and real property. See Tennessee Code 1-3-105
  • Record: means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in a perceivable form. See Tennessee Code 1-3-105
  • Reporter: Makes a record of court proceedings and prepares a transcript, and also publishes the court's opinions or decisions (in the courts of appeals).
  • Sale: means the issuance, transfer, agreement for transfer, exchange, pledge, hypothecation, mortgage in any form, whether by transfer in trust or otherwise, of any motor vehicle or interest therein or of any franchise related thereto, as well as any option, subscription or other contract, or solicitation looking to a sale, offer or attempt to sell in any form, whether spoken or written. See Tennessee Code 55-17-102
  • State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
  • Vehicle: means every device in, upon or by which any person or property is or may be transported or drawn upon a highway, excepting devices used exclusively upon stationary rails or tracks. See Tennessee Code 55-8-101
  • written: includes printing, typewriting, engraving, lithography, and any other mode of representing words and letters. See Tennessee Code 1-3-105
  • Year: means a calendar year, unless otherwise expressed. See Tennessee Code 1-3-105
(b)

(1) Notwithstanding this part to the contrary, whenever heavy construction equipment is being sold at auction, no license as a motor vehicle dealer shall be required for any person or participant who purchases or bids at the auction on any motor vehicle, having three (3), four (4), or five (5) axles that is designed to unload itself and that transports crushed stone, fill dirt and rock, soil, bulk sand, coal, phosphate muck, asphalt, concrete, and other building materials. In addition, no license as a motor vehicle dealer shall be required for any person or participant who purchases or bids at the auction on any motor vehicle, including cars, pick-up trucks, flat bed trucks having two (2) or more axles, service trucks, two-axle dump trucks, or any other vehicle used by the contractor for whose benefit the auction is held or by any other contractor offering such equipment or motor vehicles for sale from the contractor’s fleet at the auction. The auction shall not be an automobile auction within this part if the sale of the motor vehicles is incidental to the sale of the heavy construction equipment, and the person conducting the auction need only be licensed as an auctioneer as required by title 62, chapter 19. Notice of the auction shall be given to the motor vehicle commission at least two (2) weeks prior to the auction. The total value of all motor vehicles sold at the auction shall not exceed ten percent (10%) of the sales prices of all equipment sold at the auction.
(2)

(A) In addition to subdivision (b)(1), no motor vehicle dealer license shall be required for the operator of a permanent auction facility that has been in continuous operation for at least two (2) years prior to January 1, 2008, and that:

(i) Sells large construction equipment in an auction format;
(ii) Has sales of used motor vehicles whose total value does not exceed fifteen percent (15%) of the total value of all equipment sold, including motor vehicles, as calculated on an annual basis;
(iii) Maintains a regularly staffed facility during normal business hours of not less than thirty (30) hours per week;
(iv) Has a permanent facility with at least fifty (50) contiguous fenced acres located in this state;
(v) Has titles present for all vehicles to be sold by auction at the facility;
(vi) Conducts, at the facility, not more than five (5) such auctions in a calendar year, one (1) of which may be a “vehicles only” auction;
(vii) Does not sell new or unused motor vehicles, or vehicles with a manufacturer‘s statement of origin only; and
(viii) Sells, at the facility, only motor vehicles that:

(a) Weigh in excess of ten thousand pounds (10,000 lbs.) gross vehicle weight rating (GVWR); or
(b) Weigh less than ten thousand pounds (10,000 lbs.) gross vehicle weight rating (GVWR) if owned by an entity that used the motor vehicle in its normal business operation as either a construction or common carrier or transportation-related entity hauling freight.
(B) The auction shall file with the motor vehicle commission on an annual basis a certification stating:

(i) That all such vehicles sold were not vehicles covered under the Tennessee Consumer Protection Act, compiled in title 47, chapter 18, part 1; and
(ii) The gross proceeds of the auction and the value of all vehicles sold at the auction.
(c)

(1) Notwithstanding this part to the contrary, whenever farm equipment and machinery, as defined in § 67-6-102, is being sold at an auction conducted on farm property in accordance with the requirements set forth within subdivision (c)(2), no license as a motor vehicle dealer shall be required for any person or participant who purchases or bids at the auction on a motor vehicle.
(2) If the sale at auction, on property owned or possessed by the farmer, of five (5) or fewer motor vehicles is incidental to the sale at auction of farm equipment and machinery owned and used by the farmer, and if each such motor vehicle is owned for at least one (1) year by the farmer, the farmer’s parents, or the farmer’s children, and if each such motor vehicle is at least two (2) model years old, and if the farmer has not sold motor vehicles at an auction within the previous twelve-month period, then the auction shall not be an automobile auction within this part, and the person conducting the auction need only be licensed as an auctioneer by the auctioneer commission; provided, that the auctioneer must give at least fourteen (14) days’ advance written notification to the motor vehicle commission describing the time and place of the auction as well as the items to be sold therein.
(d)

(1) Notwithstanding this part to the contrary, a motor vehicle dealer license shall not be required to purchase nonrepairable vehicles, salvage vehicles, or a combination of nonrepairable and salvage vehicles from an automobile auction if the automobile auction primarily sells motor vehicles on consignment.
(2) A natural person who resides in this state may purchase at retail no more than five (5) nonrepairable vehicles or salvage vehicles, or any combination thereof, within a twelve-month period.
(3) Each automobile auction engaged in the sale of nonrepairable vehicles, salvage vehicles, or a combination of nonrepairable and salvage vehicles, shall:

(A) Keep an electronic record of all sales of each vehicle and include in the record the make, model, year, vehicle identification number, and the name and address of the purchaser and seller of the vehicle;
(B) Obtain from the purchaser of each vehicle a copy of the purchaser’s driver license, passport, or other government-issued identification. The automobile auction shall maintain each copy obtained under this subdivision (d)(3)(B) for a period of two (2) years from the date of obtaining the copy; and
(C) Obtain from the purchaser of each vehicle a copy of any license or other authorization required to do business under this chapter or, if the purchaser represents a third party authorized to purchase the vehicle under this chapter, a copy of the third party’s license or other authorization required to do business under this chapter and a copy of any document authorizing the purchaser to act on behalf of the third party. The automobile auction shall maintain each copy obtained under this subdivision (d)(3)(C) for a period of two (2) years from the date of obtaining the copy.
(4) Each automobile auction required to maintain records pursuant to subdivision (d)(3) shall make the records available, upon written request, to:

(A) Law enforcement officers;
(B) The department of revenue; or
(C) The motor vehicle commission.
(5) This subsection (d) shall not limit:

(A) The sale of nonrepairable vehicles or salvage vehicles to a person who resides outside of this state; or
(B) The sale of nonrepairable vehicles or salvage vehicles titled in a state or jurisdiction other than this state.
(6) A violation of this subsection (d) is a Class A misdemeanor, punishable by a fine of no less than one thousand dollars ($1,000) and no more than two thousand five hundred dollars ($2,500).
(7) An action to impose any penalty under this subsection (d) may be brought in any court of competent jurisdiction by a district attorney or the attorney general and reporter.
(8) Monies generated from any fine imposed pursuant to subdivision (d)(6) shall be used only for purposes of enforcement, investigation, prosecution, and training as those purposes relate to violations of this subsection (d).
(9) As used in this subsection (d):

(A) “Nonrepairable vehicle” has the same meaning as defined in § 55-3-201; and
(B) “Salvage vehicle” has the same meaning as defined in § 55-3-201.
(e) When motor vehicles are sold incidentally at a bona fide going-out-of-business sale, no license as a motor vehicle dealer is required to sell the vehicles at auction if:

(1) All vehicles for sale were owned and titled in the name of the business for at least one (1) year prior to the going-out-of-business sale;
(2) The auctioneer gives a fourteen-day prior written notification to the motor vehicle commission providing the time and place of the sale and a list of items to be sold; and
(3) The sale does not violate the Tennessee Consumer Protection Act of 1977, compiled in title 47, chapter 18, part 1.
(f)[Repealed effective October 16, 2023.]

(1) Notwithstanding this part, a motor vehicle dealer license is not required to sell or purchase previously titled antique or unique motor vehicles through an auction format held in conjunction with a motor vehicle festival:

(A) Held at a municipal convention center, as defined in § 7-4-101, located in a county with a population of not less than three hundred sixty-six thousand two hundred (366,200) and not more than three hundred sixty-six thousand three hundred (366,300), according to the 2020 federal census or any subsequent census; and
(B) For which a portion of the festival’s proceeds are donated to a hospital neurological institute located in a county with a population of not less than three hundred sixty-six thousand two hundred (366,200) and not more than three hundred sixty-six thousand three hundred (366,300), according to the 2020 federal census or any subsequent census.
(2) This subsection (f) is repealed on October 16, 2023.
(g) [Repealed, effective October 17, 2022.]
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