Texas Auto Dealer License and Surety Bond Guide

Auto Dealer bonds do not protect the car dealer from lawsuits, but it protects the consumer from fraud or misrepresentation by the auto dealer.  Auto Dealer Bonds guarantee compliance with state laws and every state sets its own bond amount, period and expiration date. Auto Dealers are required to obtain a motor vehicle surety bond which is also known as DMV bond, used car dealer bond in the amount for $50,000 for a 2 year period. Auto dealer is required by the State Motor Vehicle Departments to obtain a dealership license in the state in which your dealership is located.

Texas Department of Motor Vehicles requires that all Texas auto dealers secure a surety bond in the amount of $50,000. This is a licensing requirement in order to engage in vehicle sales in the state of Texas (see more information on Texas license requirements). A surety bond is required for all GDN categories of a motor vehicle, motorcycle, wholesale only, wholesale motor vehicle auction and independent mobility motor vehicle, but a surety bond is not required of franchised dealers, travel trailer dealers, or trailer/semitrailer dealers. The cost varies based on the applicant’s credit history and the rate can start from around 1% and up from the bond amount needed for a two year period. As required by the state of Texas, these auto dealer surety bonds are issued for a two-year term, expire on the last day of the month. ABC Bonding of Texas is a licensed bonding agency in Texas and offers exceptional rates for Texas Motor Vehicle Dealer Bonds.

ABC Bonding of Texas rates for Texas auto dealer bonds start from $250 for 2 years, one of the lowest rates around. Call our agents for more information or to apply for a dealer bond.

Texas Auto Dealer License Requirements?

• To regulate the Auto Dealer trade, the state subjects Texas Automobile Dealer to many legal restrictions and requirements. For a new Dealer license in Texas, the first step is to obtain a General Distinguishing Number (GDN). This requires, among other things, a permanent place of business, business phone number, a business Signage, an office, enough space to display of at least five vehicles the dealer intent to sell.
• You’ll need a GDN whether you sell new cars or used them. If you also sell motorcycles. RV’s or other trailers, you’ll need separate GDN for each class of vehicle.
• Each original GDN costs $800 for new license, and $400 to renew every 2 years in Texas.

How to obtain a Texas Dealer License?

Forms and Applications for Texas auto dealer license can be found on the TXDMV.gov , see below links

• Auto Dealer Overview Instructions
• Application for New Dealer License GDN
• Instructions for completing the dealer license application
• An application to amend Business Entity
• Payment and mailing instructions

Where to Apply for Texas Dealer License?

To contact the Motor Vehicle Division’s licensing department, you may write to the following address:

Texas Department of Transportation
Motor Vehicle Division
Licensing Section
P.O. Box 2293
Austin, TX 78768-2293

Phone: (877) 366-8887 or (512) 416-4800
Fax: (512) 416-4893