Getting a used car dealer license in Texas

In Texas, used-car dealers are licensed by TxDMV Motor Vehicle Division.

Before your first retail sale you’ll need a $50,000, surety bond, a 6-hour pre-licensing course and a business location that meets the state’s rules.

This page gathers what a new independent lot needs, each fact linked to the official source it came from.

Sources checked · details re-checked against official sources

At a glance

License
Independent Motor Vehicle General Distinguishing Number (GDN) txdmv.gov (source, opens in a new tab)
Issued by
TxDMV Motor Vehicle Division txdmv.gov (source, opens in a new tab)
Surety bond
$50,000, with a two-year bond term matched to the license. txdmv.gov (source, opens in a new tab) That’s the bond’s face amount, not what you pay: a surety company charges a yearly premium, usually a small percentage of it, set mainly by your credit.
Pre-licensing course
At least 6 hours of online licensing education from a TxDMV-approved provider (Texas Dealer Education or Texas Dealer License Training), costing no more than $150 per person. One owner or operating manager per business takes it, once; it isn't repeated at renewal. txdmv.gov (source, opens in a new tab)
Official fees
GDN $700/category for two years; dealer plate $90 for term. txdmv.gov (source, opens in a new tab)
Renewal
Two-year term. Education is a one-time requirement for unchanged qualifying ownership/management, not recurring CE. txdmv.gov (source, opens in a new tab)

Step by step

  1. Make sure you need an independent GDN

    To sell used cars to the public in Texas you need an Independent Motor Vehicle General Distinguishing Number (GDN) from the TxDMV Motor Vehicle Division. A wholesale GDN doesn't allow sales to consumers, and motorcycle, trailer, mobility and franchise dealers are licensed separately. txdmv.gov › independent-gdn (source, opens in a new tab)

  2. Take the 6-hour online course

    One owner or operating manager takes at least 6 hours of online licensing education from a TxDMV-approved provider: Texas Dealer Education or Texas Dealer License Training. It costs no more than $150 per person, and you take it once; it isn't repeated at renewal. txdmv.gov › education (source, opens in a new tab)

  3. Set up the business

    Register your business entity or assumed name (DBA), gather ID for every owner, and name an ePLATE administrator. The application also asks for criminal history disclosures, so have those ready. txdmv.gov › txdmv_LG100.pdf (source, opens in a new tab)

  4. Find an office that qualifies

    This is usually the hardest part, so start early. You need an office of at least 100 sq ft with a 7-foot ceiling, a desk, two chairs and internet, open at least 4 consecutive hours a day, 4 days a week, with secure storage for plates. Homes, motels and virtual offices don't qualify, the site must meet local zoning, and the lease has to cover the whole license term. txdmv.gov › Dealership-Premises-Checklist-MVD_LF628.pdf (source, opens in a new tab) txdmv.gov › txdmv_LG100.pdf (source, opens in a new tab)

  5. Set up the display area and sign

    Outside, you need a display area used only for your cars, with room for at least 5 vehicles not counting driveways or customer parking, and lighting for evening display. Add a permanent sign with letters at least 6 inches tall, readable from 100 feet from the office entrance. txdmv.gov › Dealership-Premises-Checklist-MVD_LF628.pdf (source, opens in a new tab)

  6. Get the $50,000 bond

    The bond runs for two years, matched to the license. You don't pay that amount: a surety company charges you a premium, a fraction of it, set mainly by your credit. txdmv.gov › eLICENSING-UserGuide_Independent-GDN-Licensees.pdf (source, opens in a new tab)

  7. Apply in eLICENSING

    File the electronic GDN application with photos of the location, your disclosures and the fee: $700 per license category for two years. Work through TxDMV's LG100 Independent Dealer checklist and LF628 premises checklist so nothing is missing. A dealer plate is $90 for the term. txdmv.gov › dealer-license-application-process (source, opens in a new tab) txdmv.gov › txdmv_LG100.pdf (source, opens in a new tab)

  8. Get fingerprinted when TxDMV asks

    Fingerprints come after you apply: TxDMV tells you when to get them. txdmv.gov › txdmv_LG100.pdf (source, opens in a new tab) txdmv.gov › dealer-license-application-process (source, opens in a new tab)

  9. Fix anything flagged, then wait for approval

    If TxDMV finds deficiencies, correct them and wait for approval. TxDMV reports that processing times are longer than usual. txdmv.gov › dealer-license-application-process (source, opens in a new tab) txdmv.gov › txdmv_LG100.pdf (source, opens in a new tab)

  10. Keep it current

    The GDN runs for two years. The course is a one-time requirement as long as the qualifying owner or manager stays the same, so there's no recurring continuing education. txdmv.gov › education (source, opens in a new tab) txdmv.gov › eLICENSING-UserGuide_Independent-GDN-Licensees.pdf (source, opens in a new tab)

The location

Display lot
Exclusive display for at least 5 vehicles, excluding driveways/customer parking; lighting for evening display. txdmv.gov (source, opens in a new tab)
Office
At least 100 sq ft, 7-ft ceiling, desk/2 chairs/internet. Open 4 consecutive hours/day, 4 days/week. Secure plate storage. txdmv.gov (source, opens in a new tab)
Sign
Permanent durable sign, letters at least 6 inches, readable 100 ft from office entrance. txdmv.gov (source, opens in a new tab)
Zoning and home-based lots
Local zoning compliance; residential, motel and virtual offices prohibited. Lease must cover license term. txdmv.gov (source, opens in a new tab)

Before you apply

Entity/DBA and ownership IDs; criminal disclosures; agency-directed fingerprints after notice; ePLATE administrator. txdmv.gov (source, opens in a new tab)

Forms

Electronic GDN application; LG100 Independent Dealer application checklist (08/26); LF628 premises checklist (08/25). txdmv.gov (source, opens in a new tab)

Get the current versions from txdmv.gov; we don’t host copies.

Not the license you’re after?

Wholesale GDN excludes consumer sales. Motorcycle, trailer, mobility and franchise licenses are distinct categories. txdmv.gov (source, opens in a new tab)

What trips people up

Our read of the requirements above, not official guidance or statistics.

The hardest part: finding a compliant site with a lease covering the entire two-year term.

Easy mistakes:

Questions

How much does a Texas dealer license cost?

TxDMV charges $700 per license category for the two-year GDN and $90 per dealer plate for the term, and the course costs no more than $150 per person. On top of that you pay a premium on the $50,000 bond and the costs of a qualifying location, which vary too much to quote. txdmv.gov › eLICENSING-UserGuide_Independent-GDN-Licensees.pdf (source, opens in a new tab) txdmv.gov › education (source, opens in a new tab)

Can I run a dealership from home in Texas?

No. Residential, motel and virtual offices don't qualify, and the location must meet local zoning. txdmv.gov › Dealership-Premises-Checklist-MVD_LF628.pdf (source, opens in a new tab) txdmv.gov › txdmv_LG100.pdf (source, opens in a new tab)

How long does it take?

TxDMV reports longer processing times than usual, and we couldn't find a published timeframe. The course, the location, the bond and fingerprints all come before approval, and finding a compliant location is usually the hardest part. txdmv.gov › dealers (source, opens in a new tab) txdmv.gov › dealer-license-application-process (source, opens in a new tab)

Do I need continuing education?

No. The 6-hour course is a one-time requirement while the same qualifying owner or manager stays in place. txdmv.gov › education (source, opens in a new tab) txdmv.gov › eLICENSING-UserGuide_Independent-GDN-Licensees.pdf (source, opens in a new tab)

Sources

Not affiliated with the Texas DMV. Not legal advice. Requirements change; always confirm with the state.