How to Get a Dealer License in Texas
In Texas, dealer licensing runs through the Texas Department of Motor Vehicles (TxDMV). To get a used car dealer license in Texas you'll need a registered business, a compliant location, a $50,000 surety bond, and the fees below. Whether you're opening a car lot, going wholesale-only, or starting a buy-here-pay-here operation, this guide walks the Texas auto dealer license requirements, real costs, and the exact steps — in plain English. Rules change, so verify everything against the Texas Department of Motor Vehicles (TxDMV)'s current pages before you file.
- Surety bond
- $50,000
- License term
- Two-year term; renew through eLICENSING before expiration.
- Sales threshold
- More than 5 vehicles in a 12-month period generally requires a dealer license.
- Pre-licensing
- TxDMV requires new-applicant dealer training (a Dealer Education/OpTIN-style course) before a GDN is issued.
License types in Texas
| License type | What it covers |
|---|---|
| Motor Vehicle Dealer (GDN) | Retail and/or wholesale sales of used motor vehicles under a General Distinguishing Number. |
| Wholesale GDN | Dealer-to-dealer and auction sales only — a single retail sale is a violation. |
| Franchised (new-car) Dealer | New-vehicle sales — a separate franchise license on top of a GDN. |
| Independent Motorcycle / Travel Trailer GDN | GDN endorsed for the specific vehicle type being sold. |
What it costs
| Item | Cost | Notes |
|---|---|---|
| GDN application fee | $700 | Two-year license term, filed via eLICENSING |
| Surety bond (face amount) | $50,000 | Annual premium you pay is a fraction of this, based on credit |
| Plate / temp-tag setup | Varies | Metal-plate inventory via webDEALER since HB 718 |
| Assumed name / DBA + local permits | Varies | County/city business filings |
Step by step
- Form and register your business entity, and file any assumed-name (DBA) paperwork.
- Secure a compliant physical location and pass the premises requirements (office, sign, display area, hours).
- Obtain the $50,000 surety bond.
- Complete the required TxDMV dealer education/training.
- Apply for the GDN through TxDMV eLICENSING and pay the $700 fee.
- Pass the site inspection and set up webDEALER for titles and metal-plate issuance.
Premises & temp tags
Location: A permanent physical location that meets TxDMV premises rules — a proper office, a display area, a compliant sign, and posted business hours. Home-based lots rarely qualify for a retail GDN.
Temp tags / plates: Since HB 718 (effective July 1, 2025), paper temporary tags are eliminated — dealers issue metal plates at the point of sale and process the title through webDEALER.
Texas-specific things to know
- A wholesale GDN is cheaper to run (lighter premises rules) but you cannot sell to a retail customer off it — one retail sale is a violation.
- HB 718 ended paper temp tags statewide as of July 1, 2025 — every dealer now issues metal plates and titles through webDEALER.
- TxDMV has pursued large fines for temporary-tag and title fraud, so clean webDEALER records matter.
Official Texas resources
Texas dealer license FAQ
How much does a dealer license cost in Texas?+
GDN application fee: $700; Surety bond (face amount): $50,000; Plate / temp-tag setup: Varies; Assumed name / DBA + local permits: Varies. Plus the $50,000 surety bond (you pay a small annual premium on that, not the full amount).
How big is the dealer bond in Texas?+
Texas requires a $50,000 surety bond. Doubled from $25,000 by the Legislature in 2023; a surety bond or acceptable equivalent is required per licensed location.
Do you need a physical lot to get a dealer license in Texas?+
A permanent physical location that meets TxDMV premises rules — a proper office, a display area, a compliant sign, and posted business hours. Home-based lots rarely qualify for a retail GDN.
How many cars can you sell in Texas without a dealer license?+
More than 5 vehicles in a 12-month period generally requires a dealer license.
How long is a Texas dealer license valid?+
Two-year term; renew through eLICENSING before expiration.
Is dealer training or an exam required in Texas?+
TxDMV requires new-applicant dealer training (a Dealer Education/OpTIN-style course) before a GDN is issued.
How do temporary tags work for Texas dealers?+
Since HB 718 (effective July 1, 2025), paper temporary tags are eliminated — dealers issue metal plates at the point of sale and process the title through webDEALER.
Data verified 2026-07-17. Requirements change — confirm with the Texas Department of Motor Vehicles (TxDMV) before filing.
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