How to get a Texas Dealer License

What is a Texas Dealer License?

A Texas dealer license is easy to get for your business.  You need a car dealer license in Texas if you are selling, buying, or exchanging cars.  The state provides the license to each dealer and sometimes refers to it as a GDN or general distinguishing number.  The license allows you to act as a car dealer legally within the state.  Additionally, it’s how you can get dealer plates.

Who needs a Texas Dealer License?

Anyone selling, trading, or buying 5 or more cars, trailers, and motorcycles as a business needs a dealer license in Texas.  A person who is only buying a car does not need one.  However, if that person buys multiple vehicles to resell them at a later date, he or she would need to be a licensed dealer.  This is because that person is engaging in a practice which is consistent with a car dealership.

How do I get a Texas Dealer License?

Here are the steps to get your Texas car dealer license:

  1. Determine your license type – (The listing below contains only licenses which require a GDN)
    1. Motor Vehicle – Used vehicles only.
    2. Motorcycle – Used motorcycles and ATV’s only.
    3. Travel Trailer (Towable RV’s) – Used travel trailers only.
    4. Utility or Semi Trailer – New and used utility or travel trailers only.
    5. Wholesale – Can only sell wholesale to other licensed dealers.  No retail sales.
    6. Wholesale Auction – Allows you to sell vehicles at auction.
    7. Mobility Vehicle – Vehicles equipped to transport disabled persons only.
    8. Franchise – New cars only
  2. Complete the Independent Dealer Application
  3. Get a Texas Dealer Surety Bond
  4. Send your completed application and attachments to the Texas DMV
    1. By faxing all documents to the DMV at 512-465-4190
    2. Or mailing all documents to the DMV at Texas DMV, Motor Vehicle Division, PO Box 26487, Austin, TX 78755
  5. Pay the Texas Dealer License Fee

The state will then process what you sent them.  It will be approved or denied based on the information they received.  If your application is missing something, you’ll get a chance to give the state any missing information.  The fastest way to get your license is to make sure you provide the DMV with everything listed in the application.

How long does it take to get a Texas Dealer License?

The average time for approval is 2-3 weeks once the state receives your dealer application.  However, if your application is incomplete, you’ll receive a letter from the state asking for what’s missing or a correction to one of the documents.  Any missing information will slow down your approval.

How long is my license good for?

A Texas dealers license is good for 2 years from the time it’s approved.  The license term begins on the first day of the month and ends on the last day of prior month two years later.  For example:  Your license term might begin on November 1st, 2016 and end on October 31st, 2018.

Do all Texas license types need a surety bond?

No, not all licenses require a surety bond.  Those dealers selling travel, utility, or semi trailers do not need to post a bond.  However, all other independent dealers need to post a $25,ooo surety bond.  You can obtain one by applying for it online.

Who doesn’t need a license to sell vehicles in Texas?

There are a few exceptions to the rules when it comes to licensing.  You do not need a license if:

  • You sell less than five cars per year which are registered in your name only;
  • You’re a local, state, or federal agency;
  • You sell a vehicle in which you have a security interest (forced sale);
  • You’re an insurance company;
  • You’re a court appointed representative;
  • You’re selling an antique car/truck over 25 years old; or
  • You’re selling a special interest vehicle.

What if I want to sell used cars and trailers?

You’ll need to complete an application for both license types.  Each license type has its own GDN.  Remember, GDN stands for general distinguishing number.  This number identifies your license type and location of your dealership.  You can’t legally perform activities of another type of license if you haven’t obtained that license type.

Back to the Surety Bond Learning Center