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.
Bond Amount: $50,000
Required by: Texas Department of Motor Vehicles
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.
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.
All independent car dealers in Texas need a $50,000 Motor Vehicle Dealer Bond. This includes the following:
Note that franchise dealers don’t need 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
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.
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.
You are required to submit your bond with the rest of your dealer application to your Texas DMV e-licensing account.
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.
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.
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
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.
