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How to get a used car dealer license in Texas

You apply to the Texas Department of Motor Vehicles through eLICENSING for an Independent Motor Vehicle GDN, which runs for two years. Texas requires a $50,000 surety bond, a 6-hour online course, fingerprints, and a real office with display space for five vehicles.

  • Sourced to TxDMV
  • Checked October 2026
  • Free
License
Independent Motor Vehicle General Distinguishing Number (GDN)
Surety bond
$50,000
State fee
$700
Pre-license course
6 hours online, one time
Background check
Fingerprints, everyone listed
License term
2 years
What the state asks for

Texas dealer license requirements

The figures a first-time used car dealer needs before applying to TxDMV. Each row shows how well it is supported.

Surety bond
$50,000Official source

A Motor Vehicle Dealer Surety Bond with its power of attorney. It must run for the full two-year license term, end on the last day of a month, and show your exact legal name and physical address.

State license fee
$700Official source

Per GDN category for the two-year original license ($500 for the first year plus $200 for the second). Standard dealer plates are $90 each and dealer temporary plates are $10 each.

Pre-license education
6 hours online, one timeOfficial source

New independent motor vehicle GDN applicants take a TxDMV-approved online licensing education course. It costs no more than $150, one owner or manager takes it, and it is not repeated at renewal.

Background check
Fingerprints, everyone listedOfficial source

Owners, officers, managers and other representatives listed on the application are fingerprinted through IdentoGO. Wait for the TxDMV email that says fingerprints are required before you go.

Insurance
Confirm with TxDMVConfirm with the agency

The TxDMV new application checklist (LG100) does not list proof of insurance as a filing item. Ask TxDMV and your insurer what coverage you need for inventory and dealer plates.

Business location
100 sq ft office, 5-vehicle displayOfficial source

A private office of at least 100 square feet in a permanent building, a display area for at least five vehicles, a permanent sign, posted hours and locked metal plate storage.

License term and renewal
2 yearsOfficial source

The GDN is valid for two years from the issue date. The renewal fee is $200 a year by statute, and you can file the renewal in eLICENSING up to 180 days before the license expires.

Sales allowed without a license
4 per calendar yearOfficial source

You need a GDN once you sell or offer five or more vehicles of the same type in a calendar year. The exemption only covers vehicles owned and registered in your own name.

Processing time
Not publishedConfirm with the agency

TxDMV does not publish a number of days. It says processing time depends on application volume, how complete your file is, fingerprint results and any follow-up review.

“Official source” means the state agency’s own page, form or law. Where the state’s sources did not settle a point, the row says so instead of showing a guess.

Who issues the license

Texas Department of Motor Vehicles, Motor Vehicle Division

License you apply for

Independent Motor Vehicle General Distinguishing Number (GDN)

Official licensing page

Paper temporary tags ended on July 1, 2025

Under House Bill 718, Texas dealers now issue metal license plates at the time of sale and must use webDEALER for title and registration. Some TxDMV pages and older guides still mention temporary tags. Plan for metal plate inventory and locked plate storage from day one, and follow the TxDMV House Bill 718 page rather than older instructions.
Step by step

How to get a Texas dealer license

The order that works for a first application. Tick each step off as you finish it.

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  1. Set up the business and choose the GDN category

    Form the entity with the Texas Secretary of State if your business type requires it, file any assumed name certificate, and get an EIN. For ordinary used cars and light trucks sold at retail, choose the Independent Motor Vehicle GDN, not the wholesale GDN.

    Independent Motor Vehicle GDN

  2. Complete the licensing education course

    One owner or manager listed on the application takes the 6-hour online course from a TxDMV-approved provider. The price is capped at $150. Keep the completion certificate, because you upload it with the application. You only take the course once.

    6 hours online · up to $150

  3. Find a location that passes the premises checklist

    Check the site against Form LF628 before you sign anything: a 100 square foot private office, display space for five vehicles, a permanent sign, posted hours and locked plate storage. Get any zoning certificate the city requires, in the dealer's name, for motor vehicle sales.

    Form LF628 · 43 TAC 215.140

  4. Sign the lease and buy the bond

    The lease must cover the license term: two years, or one year with an option to renew for another. Then buy the $50,000 Motor Vehicle Dealer Surety Bond for a two-year term. The bond must show your exact legal business name and physical address and be signed and dated.

    $50,000 bond, two-year term

  5. Apply in eLICENSING

    File the new GDN application online with photos of the sign, building, office, display area, plate storage and posted hours. Pay $700 per GDN category plus any dealer plates. The payment must come from an account held by the applicant, or by the applicant's attorney or CPA.

    eLICENSING · $700 per category

  6. Get fingerprinted when TxDMV tells you to

    After TxDMV reviews the application, it emails instructions and a service code if fingerprints are required. Everyone named in that email then goes to IdentoGO. Do not get fingerprinted before the email arrives.

    43 TAC 211.6 · IdentoGO

  7. Set up webDEALER, ePLATE and your tax accounts

    Once the GDN is issued, set up webDEALER and ePLATE, which you need to process titles and assign metal plates. Within 30 days of the license active date, tell the county tax office and the appraisal district that you are a new dealer. If you will finance sales, contact the OCCC about its license.

    webDEALER and ePLATE

Practical advice

Walk the property with Form LF628 in hand before you sign a lease. Shared buildings are where applications stall: each dealer needs a walled private office, its own lease, phone and sign, and five display spaces written into the lease. Give the surety the exact legal name and suite number from your Secretary of State filing, because a mismatch on the bond is a common deficiency.

Before you apply

Seven things to settle before any state application: the business, the owners, the money and the property.

Read the startup playbook
The lot and the office

Texas dealer location requirements

What the state checks at the business address.

  • Private office of at least 100 square feet with a 7-foot ceiling, a door that closes, a desk, two chairs and working internet.
  • Office in a building with a permanent roof and walls. Not a residence, hotel, or a virtual or subscription office.
  • Display area for at least five vehicles, reserved only for inventory. Customer or employee parking does not count.
  • Permanent sign with letters at least six inches high, visible within 100 feet of the main entrance. Banners are not accepted.
  • Open at least four days a week for at least four consecutive hours a day, with hours for all seven days posted. Appointment only is not allowed.
  • Locked room or closet, or a locked safe or steel cabinet fixed to the floor or wall, large enough to hold all your metal plates.
  • Lease that runs the full license term: two years, or one year with an option to renew for another year.

Zoning comes first

A site that meets the state’s rules can still fail local zoning. Get written approval for vehicle sales from the city or county, and ask the landlord for a lease that depends on the license being issued, before you sign.
Once you are licensed

Keeping a Texas dealer license

Renewal and ongoing duties

Renew in eLICENSING every two years with a new two-year bond. You can file up to 180 days early. Sell or assign at least five vehicles each calendar year or TxDMV may revoke or cancel the license. File the monthly vehicle inventory tax statement even in months with no sales, and keep the premises, posted hours and plate storage in compliance for the whole term.

Federal rules that apply here too

  • The FTC Buyers Guide, posted on every used vehicle you offer for sale.
  • The FTC Safeguards Rule: a written plan for protecting customer financial information.
  • IRS Form 8300 when a customer pays more than $10,000 in cash.
  • A federal odometer disclosure on each transfer.
How each federal rule works
FAQ

Texas dealer license FAQ

The questions first-time dealers ask most.

How do I get a used car dealer license in Texas?

Apply to TxDMV through eLICENSING for an Independent Motor Vehicle GDN. Before you file, complete the 6-hour online licensing education course, set up a location that meets the premises checklist (Form LF628), sign a lease that covers the license term and buy a $50,000 surety bond. After you file, TxDMV emails you if fingerprints are required.

How much is the dealer bond in Texas?

$50,000. It is a Motor Vehicle Dealer Surety Bond, and TxDMV wants it issued for the full two-year license term, ending on the last day of a month. The amount is set in Texas Transportation Code 503.033. Travel trailer and utility trailer GDN categories are exempt from the bond.

How much does a Texas dealer license cost?

The state fee is $700 for each GDN category on the original two-year license. Standard dealer plates are $90 each and dealer temporary plates are $10 each. The licensing education course is capped at $150, and fingerprinting is paid directly to the vendor. Renewal is $200 a year by statute. Your bond premium and lease are on top of that.

Do I need a pre-licensing course in Texas?

Yes, for the Independent Motor Vehicle GDN. New applicants take a TxDMV-approved online licensing education course of at least 6 hours, priced at no more than $150. Only one owner or manager listed on the application has to take it, and it is a one-time requirement. You upload the certificate in eLICENSING.

Can I get a Texas dealer license without a car lot?

Not for retail sales. A retail GDN needs a private office of at least 100 square feet and a display area for at least five vehicles at the licensed address. The office cannot be in a residence or be a virtual or subscription office, and you cannot be open by appointment only. Wholesale dealers are not required to have a display area, but they can only sell to other licensed dealers.

How many cars can I sell in Texas without a dealer license?

Fewer than five in a calendar year, and only if the vehicles are of the same type and are owned and registered in your name. Selling a fifth vehicle, or selling even one vehicle that is not titled in your name, requires a GDN.

Sources

Checked October 2026. This is general information, not legal, tax or insurance advice. Fees, bond amounts and forms change, and local zoning rules vary. Confirm current requirements with TxDMV or your attorney before you sign a lease or pay a fee.

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