How to get a dealer license in Texas

A person may not engage in business as a dealer, directly or indirectly, including by consignment, without a dealer general distinguishing number (GDN) for each location (Transp. Code 503.021). You do not need a GDN if you sell or offer to sell fewer than five vehicles of the same type in a calendar year that are owned and registered in your name (Transp. Code 503.024). If the vehicles are not owned and registered in your name, you need a license to sell even one (TxDMV Motor Vehicle Dealer Manual 3.3).

• Independent Motor Vehicle GDN: Buying, selling, or exchanging used cars, trucks, motor homes, and neighborhood vehicles, at retail or wholesale. Bond required.
• Wholesale GDN: Selling or exchanging vehicles only with other licensed dealers. No retail sales and no five-vehicle display area. Bond required.
• Independent Motorcycle GDN: Buying, selling, or exchanging used motorcycles, motor scooters, or ATVs. Bond required.
• Travel Trailer GDN and Trailer/Semitrailer GDN: Selling used travel trailers, or new or used utility trailers and semitrailers. No bond required.
• Independent Mobility Motor Vehicle Dealer License: Offering to sell new mobility motor vehicles designed to transport a person with a disability.
• Wholesale Motor Vehicle Auction GDN: Holding dealer-to-dealer auctions at the licensed location. Only licensed dealers may attend. Bond required.
• Franchise License: Buying, selling, servicing, or exchanging new motor vehicles, motorcycles, or towable RVs under a franchise. You need both a franchise license and a GDN.
• Salvage Dealer License: Buying or selling more than five salvage or nonrepairable vehicles, or rebuilding more than five salvage vehicles, in a calendar year.

Surety bond. Required to issue or renew a motor vehicle dealer GDN or a wholesale motor vehicle auction GDN (Transp. Code 503.033). Franchised dealers and travel trailer and trailer/semitrailer GDNs are exempt. The bond must run two years, matching the license term, and be signed by the owner and the surety's agent with a power of attorney. Post the bond notice next to your GDN.

Insurance. TxDMV's new application checklist and dealer manual do not list a liability insurance requirement for an independent motor vehicle GDN. Independent mobility motor vehicle dealers must carry garagekeeper's insurance of at least $50,000 and products-completed operations insurance of at least $1 million per occurrence and in the aggregate.

Place of business. Own the location or lease it for the full license term. The office must be in a building with a permanent roof and walls on all sides, not in a residence, apartment, hotel, motel, or virtual office. It needs at least 100 square feet of floor space, a 7-foot ceiling, a door for private meetings, a desk, two chairs, internet, and a working phone listed in the business name (a cell phone is fine if registered in that name). You need locked storage for plates. Retail dealers need a permanently mounted sign with letters at least 6 inches high, visible within 100 feet of the main entrance, and a display area for at least five vehicles used only for inventory. Retail dealers must be open at least 4 days a week for at least 4 hours in a row each day, not by appointment only, with hours for all 7 days posted. Wholesale dealers need no display space and must be open at least 2 weekdays for 2 hours in a row. The location must meet local zoning (Form LF628).

Background check. Everyone listed on the application must be fingerprinted, but only after MVD confirms it and sends instructions. Fingerprints are taken by IdentoGO, and results come to TxDMV from the Texas Department of Public Safety and the FBI. It is a one-time requirement as long as the license stays active. The application asks about criminal history. Before applying, you can request a Criminal History Evaluation Letter for $100.

Pre-license education. Required (6 hours). Approved courses and details.

1. Form your business and file any assumed name certificate with the Texas Secretary of State or your county, as your business type requires.
2. Lease or buy a location that meets the Dealership Premises Checklist (Form LF628) for the full license term and complies with local zoning.
3. Complete the 6-hour licensing education course from a TxDMV-approved provider.
4. Buy a $50,000 motor vehicle dealer surety bond for a two-year term, signed by you and the surety's agent, with a power of attorney.
5. Take the photos listed on the Retail GDN Checklist (Form LG100): sign, building front, display space, office, plate storage, and posted hours.
6. Apply in eLICENSING and pay $700 for each GDN category.
7. Get fingerprinted through IdentoGO after MVD emails you instructions.
8. Once licensed, post your GDN and bond notice where the public can read them.

Official forms:

• Retail GDN Checklist: New Application Requirements (LG100)
• Dealership Premises Checklist (LF628)
• Motor Vehicle Dealer Surety Bond (sample)
• Motor Vehicle License Application Lookup Process and Status Codes (MVD-LF630)

A retail GDN requires display space for at least five vehicles at the licensed address. A wholesale GDN needs no display space, but you still need a qualifying office and you may sell only to other licensed dealers.

Only licensed dealers may attend Texas wholesale dealer-to-dealer auctions, and out-of-state dealers may attend with a valid license from their home state (Dealer Manual 4.15). AuctionACCESS (auctionaccess.com) restricts membership to licensed vehicle dealers and their authorized representatives.

Renew every two years in eLICENSING. You can apply up to 180 days before expiration and must include a new two-year bond. If you apply on time, you can keep doing business while the renewal is processed. If the license expires, you cannot do licensed business, a penalty of 50% of the application fee applies for each 30 days it is expired, and after 90 days the license is closed and you must apply for a new one (Dealer Manual 3.26). Failing to sell five vehicles in a calendar year can lead to cancellation or revocation, and wholesale sales count toward the five.

This is general information, not legal advice. Rules and fees change, so confirm the details with the Texas Department of Motor Vehicles, Motor Vehicle Division before you apply. Last verified October 20, 2026.

Planning the business side too? Read how to start a car dealership. Used cars you offer for sale need an FTC Buyers Guide in the window. Selling your own car instead? See how to sell a car in Texas.