Texas Auto Dealer Bond

Used Car Dealers: Used car dealers must be licensed and bonded to operate in the state of Texas. Used car dealers must obtain a general distinguishing number (GDN) from the Texas Department of Motor Vehicles to operate legally. As part of the licensing process, a $50,000 Motor Vehicle Dealer Bond is required. We've helped hundreds of dealers in Texas get licensed and bonded. Get a commitment-free motor vehicle dealer bond quote today.

New/Franchised Car Dealers: New/Franchised car dealers are exempt from the licensing/bonding requirements and do not require an auto dealer bond.

Please note this page is for car dealer licensing. If you're trying to register a vehicle with a missing title, a separate Lost Title Bond is required.

Sample Texas Dealer Bond
Motor Vehicle Dealer Bond

Bond Amount: $50,000

Required by: Texas Department of Motor Vehicles

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State Acceptance Guarantee
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Refund within 30 days
1 Year Bond Starts At
*Based on credit and experience

How Much Does a Texas Used Car Dealer Bond Cost?

Our starting price for the $50,000 Texas Motor Vehicle Dealer bond is $200 for two years and can go up to $1500 depending on the applicant's background. ‍ The price of a Texas auto dealer bond is largely based on an applicant’s credit score. In general, the higher the credit score, the lower the bond is priced at. Note that the Texas Used Car Dealer Bond has a minimum term of 2 years.

Example auto dealer lotpurple money

Texas Auto Dealer Bond FAQs

Are there other types of auto dealer bonds that I need in Texas?

Nope. The only bond you need in the state of Texas to sell cars is the $50,000 Motor Vehicle Dealer Bond we’ve listed above. 

What is a Texas Motor Vehicle Bond?

Texas Auto Dealer Bond, also referred to as Texas Motor Vehicle Dealer Bond, Texas Used Car Dealer Bond, is a legal contract among three parties: the Texas independent used car dealer (the principal), the Texas Department of Motor Vehicle (the obligee), and the surety company (the surety). The bond serves as a guarantee by the surety company that the principal (used car dealers) will abide by the dealer rules and regulations defined by the Texas DMV. The requirements are listed in Texas Transportation Code: Sec. 503.004. 

If the dealer fails to abide by local dealer rules, i.e., embezzle money of car buyers, fail to transfer titles to the valid car buyers, a claim can be made against the bond. Either the surety carrier or the court will be called on to investigate the claim. If the claim is valid, then the surety company will pay the claim up to the coverage amount ($50,000). Then, the surety company will try to recover as much of the financial damages from the principal as possible due to the claim. 

Who Needs a Texas Auto Dealer Bond?

All independent car dealers in Texas need a $50,000 Motor Vehicle Dealer Bond. This includes the following: 

  • Independent Motor Vehicle Dealer 
  • Independent Motorcycle Dealer
  • Independent Mobility Motor Vehicle Dealer
  • Wholesale Dealers

Note that franchise dealers don’t need a Texas auto dealer bond. 

How to Get a Texas Auto Dealer Bond? 

Getting a Texas Motor Vehicle Bond from SuretyNow is very simple. Our application is open 24/7. You can simply start by clicking on the “Quote” button. You would need to provide the following information on the form

  • Dealer name and any fictitious name registered with the Texas Secretary of State, if applicable 
  • Official address of the dealer
  • Dealer owner legal name and social security number (a soft credit check is required for this type of bond)

Once we receive your information, we will reach out to our 10+ insurance carrier partners to find you the most affordable rate. We generally apply a generous discount to the rate quoted by the insurance partner. Then, we will reach out to you with the best price. If you are happy with it, you can pay over the phone or with a payment link. Once paid, we will deliver your Texas Auto Dealer Bond to you. 

Time It Takes to Get the Bond

You can expect to receive your bond within 2 hours after you made your payment for your bond.  In the state of Texas, you simply need to upload the electronic version of your bond, along with the rest of your application, to your Texas Dealer license application. 

How to File the Bond? 

You are required to submit your bond with the rest of your dealer application to your Texas DMV e-licensing account.

When Do I Need to Renew My Bond? 

Your bond is renewed every two years. 90 days before your bond renewal date, we will reach out to you via email for a renewal invoice. You simply need to pay the invoice to renew your bond. 


How to Apply for a Texas Motor Vehicle Dealer License? 

Below are the general steps on how to get a Texas auto dealer license. For more detailed steps, check out our Texas auto dealer licensing guide.

Step 1: Determine the type of motor vehicle dealer license you need
Step 2: Complete a 6 Hour Pre-Licensing Training Course
Step 3: Determine Your Business Corporate Structure 
Step 4: Set Up Your Business Corporate Structure and Complete the Required Documents
Step 5: Obtain Federal Employer Identification Number (EIN) via the IRS
Step 6: Register a business with the Texas Secretary of State or County
Step 7: Find a Dealership Location and Display Lot (Must fit at least 5 vehicles)
Step 8: Install a Sign
Step 9: Get a Motor Vehicle Dealer Bond
Step 10: Submit Application through eLicensing
Step 11: Complete electronic fingerprinting 

The following documents need to be included with your application.

  • Applicant contact information
  • Business legal document, such as Article of Incorporation, where applicable
  • Photography of the business office, business sign and the display lot  
  • Fictitious name certificate if using a DBA
  • Certificate of Completion for the 6 Hour Licensing Course
  • Federal Employer Identification Number (Federal EIN)
  • Government photo IDs of all individuals listed on the license
  • $50,000 Texas Motor Vehicle Dealer Surety Bond
  • Payment of $700 fee per independent GDP licensee and $90 fee for every additional dealer license plate 
  • You will also need a copy of your lease or proof of property ownership.

How to Renew my Texas Motor Vehicle Dealer License?

You can use the DMV's online eLicensing application platform to renew your license. You should renew at least 30 days in advance. It costs $400 to renew an existing license. The state imposes a 50% late fee on every 30 days late that a license is renewed

Can You Get a Bond from Any Insurance Company?

No, your bond will only be accepted by the Texas DMV if it is issued by an insurance company authorized to conduct business in the state of Texas. The company does not need to be physically located in Texas but it needs to have at least a department of insurance license in the state of Texas. SuretyNow is proudly headquartered in Texas and we understand the Texas bonding industry inside and out. Get bonded with us now. 

How to Ensure No Claim is Filed on the Bond

  • Transfer titles promptly and correctly to the customer after car purchase
  • Truthfully present information about the vehicle condition
  • Never temper with the odometer or vehicle software
  • Follow through on car warranties 
  • Pay state taxes promptly and in full 
  • Renew license on time