A Texas dealer license is a GDN, a General Distinguishing Number issued by TxDMV through eLICENSING. It costs $700 for a two year term, requires a $50,000 surety bond, a 6 hour pre-licensing course, and a location that meets the premises rules in 43 TAC 215.140. Since July 1, 2025 there are no paper temp tags.
What you'll get: every GDN type, the real first year cost, the premises rules an inspector measures with a tape, how HB 718 changed plates and titling, the penalty amounts TxDMV actually assesses, and the order to do it in.
Who it's for: anyone opening an independent used-car lot in Texas, wholesalers going legit, and out-of-state dealers adding a Texas location.
Texas has rewritten more dealer rules since 2021 than in the prior twenty years. Bond, education, tags and titling all changed. Confirm every figure below on TxDMV's licensing pages before you file, and see our Texas dealer license state page for the current forms list.
Which GDN do you actually need?
| GDN type | What it covers | Who it fits |
|---|---|---|
| Independent Motor Vehicle | Buy, sell or exchange used cars, trucks, motor homes and neighborhood vehicles, retail and wholesale | The standard used-car lot |
| Wholesale Motor Vehicle | Dealer to dealer and auction only, never a retail customer | Auction flippers |
| Wholesale Motor Vehicle Auction | Operating a sale for licensed dealers | Auction operators |
| Independent Motorcycle | Motorcycles, scooters, ATVs | Powersports lots |
| Trailer / Semitrailer | Trailers and semitrailers | Trailer dealers, and the one GDN class exempt from the bond |
| Independent Mobility Motor Vehicle | Adapted vehicles for drivers with disabilities | Mobility dealers |
Most people reading this want the Independent Motor Vehicle GDN. Franchised new-car dealers hold a separate franchise license on top. A salvage vehicle dealer license is its own animal, also administered by TxDMV, and a boat dealer registers with Texas Parks and Wildlife rather than TxDMV, which trips up plenty of trailer and marine sellers.
A wholesale GDN is genuinely cheaper to run because the premises rules are lighter. It is also a trap if you have any intention of retailing. One sale to a retail customer off a wholesale GDN is a violation, and TxDMV treats selling a type of vehicle without the appropriate license as a revocation-level offense.
How much is a dealer license in Texas?
| Item | Cost | Source and notes |
|---|---|---|
| GDN application fee | $700 | Covers a two year license term, filed in eLICENSING |
| Surety bond, face amount | $50,000 | Tex. Transp. Code 503.033, raised from $25,000 effective September 1, 2021 |
| Bond premium, what you pay | About $500 to $2,500 per year | Roughly 1 to 5 percent of face, credit driven. Market estimate, get quotes. |
| Pre-licensing course | $150 or less | TxDMV caps the fee at $150 per person |
| Metal dealer plates | $90 per plate | TxDMV, issued on the two year license term |
| Garage liability insurance | $2,000 to $6,000 per year | Market estimate, scales with plate count and inventory |
| Plate storage safe or steel cabinet | $200 to $1,000 one time | Bolted down, required under the HB 718 storage rules |
| Sign, office fit-out, photos | $500 to $2,000 | Six inch letters, readable at 100 feet |
Call it $3,500 to $10,000 in the first year before rent. The state's own fees are the small part. Insurance and the lease decide whether the lot works.
The $50,000 bond, and why the name on it matters
Texas Transportation Code 503.033 is blunt about it: the department "may not issue or renew a motor vehicle dealer general distinguishing number or a wholesale motor vehicle auction general distinguishing number unless the applicant provides to the department satisfactory proof that the applicant has purchased a properly executed surety bond in the amount of $50,000." The bond has to run the full two year license term, beginning on the first day of a month and expiring on the last day of a month two years later. Franchised dealers are exempt. So are trailer, semitrailer and non-motorized travel trailer GDNs.
The bond guarantees two things to the public: payment of valid bank drafts you write to buy vehicles, and transfer of good title on every vehicle you sell. It is not insurance for you. A paid claim gets collected back from you, and TxDMV's disciplinary matrix lists both "failed to maintain bond" and "improper name on bond" at revocation in the low and high column alike. Not a fine. Revocation. Get the entity name on the bond identical to the entity name on the application.
What the premises inspector actually measures
This is where Texas applications die. The rules live in 43 TAC 215.140 and they are specific enough to measure.
The lease is the other trap. It has to be in the business name, cover the license term, and carry landlord authorization for vehicle sales. Zoning is on you. Plenty of Texas cities zone a suite for "retail" without permitting vehicle display, and finding that out after you sign is an expensive month.
The pre-licensing course nobody tells applicants about
Texas has required dealer education since June 20, 2020, and a lot of older advice online still says it does not. Per the TxDMV dealer education page, independent motor vehicle GDN applicants need at least 6 hours of online instruction, and renewal applicants licensed less than 10 years as of September 1, 2019 need 3 hours. The course fee "must not exceed $150 per person." Only one owner or operating manager listed on the application has to take it, and it is one time only, with no continuing education at renewal. Upload the completion certificate into eLICENSING with the rest of the file. The Texas dealer pre-license course is offered by approved Texas institutions of higher education and Texas-domiciled trade associations, and there is a Spanish-language version.
Texas dealer tags and plates after HB 718
House Bill 718 took effect July 1, 2025 and ended a twenty year run of paper temporary tags. TxDMV's own language: "All licensed dealers must issue metal license plates to buyers at the time of sale. Temporary tags will no longer be available to be printed for use." Three practical consequences:
- Metal plates at the point of sale. You draw from a plate inventory TxDMV assigns you and hand the buyer real plates at delivery.
- webDEALER is mandatory. "All licensed dealers must use webDEALER to process title and registration applications for vehicle sales." There is no paper path anymore.
- Plates live in a safe. Dealers must secure plates "in a locked room, closet, or one or more securely locked, substantially constructed safes or steel cabinets bolted to the floor or wall." Plates pulled from a trade-in have to be reassigned within 10 days or destroyed.
Treat every plate like cash, because TxDMV now prices it that way. See dealer plates explained for the difference between the metal dealer plate you drive on and the buyer plate you issue at sale.
What does TxDMV actually fine dealers?
The motor vehicle disciplinary matrix dated November 17, 2025 publishes the numbers. A sample of the ones a small independent is most likely to hit:
It is not theoretical. At its April 10, 2025 meeting the TxDMV Board revoked a dealer's GDN and imposed a $500,000 civil penalty after finding the dealer reported 177 vehicle sales between January and July 2022 while issuing 1,080 temporary tags, leaving 903 tags with no transaction behind them. The dealer's cybersecurity-breach defense did not persuade the administrative law judge.
How does titling work now that webDEALER is mandatory?
You or your title clerk scan the evidence of ownership, enter the deal, collect tax and fees, and submit the title application electronically. Then it clears through your county tax assessor-collector, and counties run their own shops. Each county requires its own ACH setup before it will process your work. Drop-off windows, runner rules and deputization differ county to county. Sell across three counties and you are effectively onboarding with three separate government offices.
Do that during licensing week, not during your first busy month. Then reconcile webDEALER submissions against your deal records weekly, because a stalled title quietly accrues holding cost and shows up as an aged unit you cannot explain. Keeping the electronic record and the paper record in agreement is the whole discipline, and it is what document tracking in Loturn is built to enforce.
Why do Texas applications get delayed or denied?
- Lease problems. Signed by the wrong entity, expiring inside the license term, or missing landlord authorization for vehicle sales.
- Zoning surprises. The city allows retail but not vehicle display. Get it in writing before you sign.
- Bond mismatches. Issued in a personal name or a DBA that does not match the entity on the application.
- Premises photos that fail the checklist. No permanent sign in frame, no distinct office, no posted hours.
- Missing course certificate. The 6 hour completion certificate has to be uploaded, not promised.
- Undisclosed criminal history. Disclosure with context is survivable. Discovery without disclosure usually is not, and TxDMV lists false statements on an application at revocation.
A clean, consistent package clears in a few weeks. Any single item above adds a month.
How do you renew, and what keeps a GDN alive?
Two year cycle through eLICENSING. Calendar it the day the license arrives, because operating on an expired GDN is unlicensed dealing. Three more things keep it alive: an unbroken bond, a location that still meets premises rules, and actual sales. TxDMV lists "failed to sell or assign five vehicles in a calendar year" as grounds for revocation, so a dormant GDN held for auction access is a license at risk. A Texas dealer license lookup on the TxDMV site will show your status the same way a customer or an auction sees it, and it is worth checking yourself once a year.
The step by step, condensed
- Form the entity, get the EIN, open the business bank account, file any assumed name.
- Verify zoning in writing, then lease a compliant location in the business name.
- Complete the 6 hour pre-licensing course and save the certificate.
- Buy the $50,000 bond in the exact entity name, dated to the license term.
- Bind garage liability insurance.
- Photograph the office, the sign and the display area against the 215.140 checklist.
- File in eLICENSING with the $700 fee and upload everything.
- Pass the site review, receive the GDN, order plates at $90 each.
- Install the bolted plate safe, complete webDEALER setup, register ACH with every county you sell into.
Comparing states before you commit to Texas? Start with the national dealer license guide. Already decided? Set up cost-per-VIN tracking before the first auction run, because titles, plates, taxes and fees are exactly the per-deal detail that a spreadsheet loses and live per-car profit does not.