How to Get a Texas Auto Dealer License

A Texas auto dealer is any person who buys, sells or exchanges more than five vehicles per year at a permanent location. The Motor Vehicle Division oversees the licensing process and issues general distinguishing numbers (GDNs) for all types of Texas motor vehicle dealers.

Complete the steps below to apply for your Texas auto dealer license with the Department of Motor Vehicles.

how to get a texas auto dealer license

Who Needs a Texas Auto Dealer License?

Texas Transportation Code Sec. 503.004 requires all motor vehicle dealers to be licensed and bonded in each county they operate in. Every type of dealer needs a GDN, which allows you to sell used vehicles. To sell new cars, you’ll also need a franchise dealer license. If you want to sell other used vehicle types, like motorcycles or trailers, you’ll need additional GDNs. Refer to the TXDMV Dealer Manual for more details.

How to Become a Licensed Auto Dealer in Texas

Follow the steps below to apply for your Texas GDN and franchise motor vehicle dealer license.

Step 1: Setup your Texas DMV eLicensing account

Create an organization account and a user account for eLicensing administration on the Texas Department of Motor Vehicles website.

Step 2: Complete the dealer training course

First-time applicants for a Texas dealer license or a GDN must complete an online training course. The owner or manager listed on the application must take the course.

Step 3: Establish your business location

Identify where you will run your dealership and ensure that it meets specific zoning, lease and display space requirements. You’ll also need to set up proper signage and a phone listing.

Step 4: Complete your license application

Apply for a basic general distinguishing number license (GDN) and any additional GDNs you may need through your eLicensing account. GDN licenses are categorized into different types, each requiring a separate application.

Fill out the in-depth application questionnaire. You'll need to provide the following dealership information.

Assumed name (DBA)
Address and physical location and any supplemental locations
All owner and general partner information
If applicable, previous auto dealer license information
Legal business structure details
If applicable, criminal history information
If applicable, military service information

Section 3.2 of the Texas DMV Motor Vehicle Dealer Manual can help you apply for the correct Texas GDN and independent license(s). If you'd like more than one type of GDN, you'll need to submit a separate application for each type.

Step 5: Upload supporting documents

You may be prompted to upload supporting documents such as an Assumed Name Certificate, your Certificate of Incorporation, or criminal history details — if necessary.

Step 6: Purchase a $50,000 surety bond

Per Texas Transportation Code 503.003, all Texas vehicle dealers need to purchase a $50,000 surety bond. You can apply for your Texas motor vehicle dealer bond online starting at $375 for the two-year term with SuretyBonds.com.

File your official bond through the eLicensing system.

Step 7: Obtain an EIN number, if applicable

Texas car dealers with the following business structures must get an Employer Identification Number (EIN) from the IRS to apply for a dealer license:

Corporations
Partnerships
LLCs
Limited partnerships

The IRS accepts EIN applications through online, phone, mail or fax methods.

Step 8: Submit online application

Complete your eLicensing application, upload documents and pay a $700 licensing fee per independent license type, plus $90 for dealer plates/stickers. You can check your status with the DMV’s license look-up tool.

Once approved, your Texas franchise auto dealer license and GDN(s) will be issued for two-year terms.

Do I Need to Renew My Texas Dealer License?

To renew your Texas auto dealer license, use the same eLicensing portal as your initial application. Submit your renewal application, new fingerprints, the $400 fee and other required documents at least 45 days before your license expires.

Texas auto dealer bonds expire on the last day of the month two years from their issue date. Contact your surety provider to renew your bond before it expires.