Texas Dealer License — the GDN, the bond and the rules that come with it.
In Texas a dealer license is a general distinguishing number, or GDN, issued by the Texas Department of Motor Vehicles, one for each location you sell from. Chapter 503 of the Transportation Code sets the terms: a $50,000 surety bond, a real place of business, and $500 for the first year. Here is who needs one, what the application takes, and what TxDMV expects once you are selling.
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Quick Answer
- How many cars can you sell in Texas without a dealer license?
- Fewer than 5 vehicles of the same type in a calendar year, as long as they are owned by and registered in your name (Transportation Code § 503.024). Selling on consignment counts as dealing.
- How much does a Texas dealer license cost?
- The state fee is $500 for the first year of an original GDN and $200 for each later year; renewals are $200 a year. You also need a $50,000 surety bond, priced by the surety, and dealer plates at $20 a year.
- Do you need a lot for a Texas dealer license?
- You need an established place of business: owned or leased for the license term, with a furnished office and a sign with letters at least 6 inches high. Retail dealers also need space to display 5 vehicles; wholesale dealers do not.
Five steps to a Texas dealer license
TxDMV runs licensing online through eLICENSING. These are the pieces the statute and the agency require.
- 1Pick the license typeOne of 7 GDN categories; independent covers used cars.
- 2Secure the locationOffice, 6-inch sign, room for 5 cars (retail).
- 3Buy the bond$50,000, approved as to form by the attorney general.
- 4Take the course6 hours online, at most $150, for independent dealers.
- 5Apply in eLICENSINGUpload the course certificate and pay the fee.
Who Needs a Texas GDN
Section 503.021 says no one may engage in business as a dealer, "directly or indirectly, including by consignment", without a GDN for each location. A dealer is someone who regularly and actively buys, sells or exchanges vehicles at an established and permanent location.
Section 503.024 lists who is not dealing: anyone selling fewer than 5 vehicles of the same type a calendar year that are owned and registered in their own name; government agencies; lenders selling under a forced sale; insurers selling cars they paid claims on; and sellers of antique cars at least 25 years old, or of special-interest cars at least 12 years old if the seller is a collector.
The 7 Kinds of Texas Dealer License
Section 503.029 makes you pick one category on the application. The four that matter most for cars:
Independent motor vehicle
Used cars, trucks, motor homes, ATVs, ROVs and UTVs. The only category that needs the pre-licensing course.
Franchised motor vehicle
New vehicles under a franchise with a manufacturer or distributor.
Wholesale motor vehicle
Sells only to other GDN holders and authorized out-of-state dealers. No display space required.
Independent mobility
Mobility motor vehicles, defined in the Occupations Code.
The Place-of-Business Rules
Section 503.032 spells out what counts as an established and permanent place of business. You must own the property or hold a written lease at least as long as the license term. The location needs a permanent furnished office equipped for selling the kind of vehicle you are licensed for, and a conspicuous sign with letters at least 6 inches high showing the business name.
Retail dealers also need room on the site to display at least 5 vehicles of the type they sell. Wholesale dealers are exempt from that one. You must also show that you intend to stay in business at that location for at least the license term.
The location checklist
- Property: owned, or leased for at least the GDN term.
- Office: permanent and furnished.
- Sign: business name, letters 6 inches or taller.
- Display: 5 vehicles (not for wholesale).
Texas Requirements at a Glance
The statute's requirements on one page: the bond, the fees, the office and sign, the display space and the course.
Every number on it comes from Chapter 503 or TxDMV's own pages.
Texas Dealer Fees and the Bond
From Transportation Code §§ 503.007, 503.008 and 503.033, read on 16 October 2026.
| Item | Amount |
|---|---|
| Original GDN, first year | $500 |
| Original GDN, each later year | $200 |
| Renewal, per year | $200 |
| Dealer license plate, per year | $20 |
| Dealer temporary plate, each | $10 |
| Surety bond | $50,000 |
| Pre-licensing course (independent dealers) | At most $150 |
So the first two years of an original GDN cost $700 in state fees. The bond premium is set by the surety, not the state.
The Bond and the Course
Section 503.033 requires a $50,000 surety bond in a form approved by the attorney general. It is conditioned on two things: that you pay the bank drafts and checks you write to buy vehicles, and that you transfer good title to every vehicle you sell. Someone who wins a judgment against you on either point can recover against the bond.
Independent motor vehicle dealers also take a one-time pre-licensing course of at least 6 hours online (3 hours for renewal applicants), costing no more than $150. Only one owner or operating manager needs to take it. Dealers licensed for more than 10 years on September 1, 2019 are exempt, and wholesale, salvage and franchised dealers never need it.
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After the License: TxDMV's Rules
Within 30 days of the license going active, notify the county tax office and the appraisal district. Each month you file a VIT statement of the previous month's sales with both, even with zero sales, and each year a Declaration of the year's total.
For each sale you have 20 business days (cash or third-party finance) or 45 calendar days (in-house finance) to file the title and registration with the county. And you must sell or assign at least 5 vehicles a calendar year, or TxDMV says the license may be revoked.
Deadlines to diarize
- 30 days: tell the county tax office and appraisal district.
- Monthly: the VIT statement, zero sales included.
- 20 business days: title work on a cash sale.
- 10 days: return plates after closing the license.
Related Checks and Guides
Other states, dealer auctions and the forms dealers use.
Where These Facts Come From
From the Texas statute and TxDMV's own pages, read on 16 October 2026. Rules and fees change; confirm with TxDMV before you apply.
CarCheckerVIN is not affiliated with TxDMV or any surety or school. This page is general information, not legal advice.
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Texas Dealer License — Frequently Asked Questions
What Texas applicants ask most.
What is a GDN in Texas?+
A general distinguishing number: the dealer license TxDMV issues for each location a dealer sells from. There are seven categories, including independent (used), franchised (new) and wholesale.
How much is the Texas dealer bond?+
$50,000, under § 503.033. It covers your checks to buy vehicles and your duty to pass good title.
Can I sell cars in Texas without a license?+
Yes, fewer than 5 vehicles of the same type a calendar year, if they are owned and registered in your name. Consignment sales count as dealing.
Does a Texas wholesale dealer need a lot?+
Not display space: § 503.032 exempts wholesale dealers from the 5-vehicle display rule. You still need an office, a sign and an owned or leased location.
Who has to take the Texas dealer course?+
Independent motor vehicle dealers only: 6 hours online for new applicants, at most $150, once. Wholesale, salvage and franchised dealers are exempt.
Can a Texas dealer lose the license for low sales?+
Yes. TxDMV says a dealer must sell or assign at least 5 vehicles a calendar year or the license may be revoked or canceled.
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