Texas Vehicle Dealer License

Name your Dealership

Your company name is the first step, because you'll use it through the entire Texas Dealer License process. It goes on the bond, on the sign at your office, and on the GDN itself.

Texas's GDN application accepts several options: sole proprietor, general partnership, limited partnership, LLP, LLC, or corporation. An LLC or corporation keeps your business separate from your personal life and adds trust to the dealer's name.

Pick the entity type you plan to use, carefully. Changing the entity later, say a sole proprietor forming an LLC, requires an application for a new GDN (43 TAC §215.145).

With an LLC or corporation, you can add an owner without applying for a new license. Notify TxDMV within 10 days. A sole proprietorship cannot add an owner; a new license is required.

Choose your Dealer License Type

Texas issues 8 Dealer License types, with a unique GDN per vehicle type or business model. Most people start with the Independent Motor Vehicle Dealer license. The Wholesale license skips the display lot and the course, and sells only to other Dealers. Salvage dealers, transporters, converters, and lessors hold separate licenses, not GDNs.

Get your Dealer Bond (Surety Bond)

A Texas Dealer License requires the purchase of a $50,000 surety bond, filed with TxDMV (Transportation Code §503.033). The bond covers your customer. A $50,000 bond costs only $350 a year, after a credit check.

The bond's term must match the GDN's 2-year term, and you need a separate bond for each GDN category you hold. Franchised dealers, travel trailer dealers, and trailer/semitrailer dealers don't need one. Texas requires no insurance policy for a standard GDN; the bond is the only financial security the license needs (IMMV Dealers excepted).

Once you're bonded:

• Post the GDN and bond notice at your dealership, naming the bonding company and how a consumer can make a claim (§503.033(g)).
• A change of business name requires a new bond or a bond rider (43 TAC §215.145(a)).
• At each renewal, the bond renews to run the exact new 2-year term.

Set up your Dealer Office

A Texas Dealer License requires an established and permanent place of business that you own or lease (Transportation Code §503.032; 43 TAC §215.140). The office must have at least 100 square feet, and a lease must run at least as long as the 2-year license.

The rule applies to every GDN type, wholesale included. A Dealer's office “may not be located in a residence, apartment, hotel, motel, rooming house, or any room or building not open to the public.”

The office “may not be virtual or provided by a subscription for office space or office services.” The table below holds the rest. Wholesale and retail differ on the display area, the sign wording, hours, and who can share the building.

Complete the Dealer Education Course — Independent Motor Vehicle Dealers only

A Texas Independent Motor Vehicle Dealer applicant must complete at least 6 hours of online education, once (Transportation Code §503.0296). Every other GDN type is exempt: motorcycle, travel trailer, trailer/semitrailer, IMMV, wholesale, wholesale auction, and franchised Dealers take no course.

You pick a provider from TxDMV's approved list: a Texas college or a Texas motor vehicle trade association, teaching a department-approved course.

The course:

• At least 6 hours, online.
• Costs no more than $150 per person, a cap set by rule; a trade association can't charge nonmembers more.
• One time only. Once you've completed it, no renewal requires more education; TxDMV may ask for proof of the certificate.
• Military service members, spouses, and veterans get credit for prior training and may be exempted.

Pass the Background Check (Criminal History Review)

Every person listed on a Texas GDN application discloses their criminal history to TxDMV. Texas takes no fingerprints from a Dealer with fewer than 75 locations (Transportation Code §503.0292), and there is no state fee for the review.

If you have a record, ask TxDMV before you apply whether it disqualifies you, with a Criminal History Evaluation Letter (Occupations Code §53.102).

The review includes:

• Every owner, partner, member, or principal; every officer, director, manager, or trustee; and the on-site manager if the owner lives out of state.
• Any arrest, conviction, deferred adjudication, or court martial, past or pending: the offense, date, and location, plus copies of the court papers.
• Fingerprints only for a GDN holder with 75 or more locations, and then 1 person per 100-mile cluster (HB 2522, effective September 1, 2025).
• Everything the question asks: omitting information is its own ground for denial or cancellation (43 TAC §215.141(b)(22)).

Certify your Location (Notarized Affidavit)

A Texas GDN application requires photos of your business premises and a notarized affidavit (43 TAC §215.133(c)(2)(G)). The affidavit certifies that every office requirement is met and will stay met for the whole 2-year license period. Texas doesn't send an inspector to every new Dealer; you certify the location yourself and upload both with the application.

Submit your Dealer License Application

You apply for a Texas Dealer License online, through TxDMV's eLICENSING portal, and the fee is $700 per GDN category for the 2-year license. That is $500 for the first year and $200 for the second (Transportation Code §503.007). There is no paper form; the User Guide walks through every screen, and every other fee is in the costs table.

The portal registers your business with an EIN, or your SSN if you're a sole proprietor. The application itself collects the name, SSN, date of birth, and ID of every owner, partner, member, principal, officer, director, manager, and trustee. An owner who lives out of state names an on-site manager or employee the same way.

Get your Dealer License Plates

A new Texas Independent Motor Vehicle Dealer starts with 2 Dealer license plates, at $90 per plate for the 2-year license term. A new Franchised Dealer starts with 5. TxDMV's plates page charges $90; the statute still reads $20 a year (Transportation Code §503.008), and no government source explains the gap.

Dealer plates let you drive your inventory. TxDMV lists personal use among the allowed uses, alongside loaner use while a customer's car is repaired, transport between locations, road testing, and charity use. The vehicle can't display signs, carry a load, or perform services for the dealership.

Dealer's temporary plates, for business use, are $10 each. A new Independent Motor Vehicle Dealer can get up to 25, a Wholesale Dealer 10, a trailer or IMMV Dealer 5.

Since July 1, 2025 (HB 718), Texas has no paper temporary tags:

• A Texas buyer gets a buyer's license plate from you at the sale; the $10 fee is remitted to TxDMV.
• An out-of-state buyer gets a 60-day buyer's temporary plate.
• Every plate you hold stays in a locked room or closet, or a bolted-down safe or steel cabinet.
• Every plate transaction is logged in TxDMV's electronic system.
• TxDMV sets your yearly buyer's-plate allotment by rule, from your time in business and your sales, with a request process for more (§503.0633).

Dealer License Cost

A Texas Dealer License costs $700 to start and $400 to renew, every 2 years, for each GDN category you hold. Every other fee on this page is in the table.

Dealer License Renewal

A Texas Dealer License is valid for 2 years and renews through eLICENSING for successive 2-year terms, at $400 ($200 a year, Transportation Code §503.007(b)). Every requirement, from the office to the bond, must stay in place for the whole term (TxDMV eLICENSING guide).

• The bond renews to match the exact new 2-year term.
• Plates renew with the license, at the plate fee in force then.
• No education is owed again once you've completed the course; TxDMV may ask for proof of the certificate.

Support

TxDMV answers Dealer License questions by phone and email, and its eLICENSING Service Desk covers the portal itself.