How to Get a Dealer License in Texas (GDN): Cost & Requirements

Last updated: August 24, 2026

A Texas dealer license is a General Distinguishing Number (GDN) issued by TxDMV. The core numbers: $700 per license category for a two-year license, a $50,000 surety bond, a 6-hour course (independent motor vehicle dealers only, capped at $150), and a physical location that meets the state’s premises rules. You only get to skip all of this if you sell fewer than five vehicles a year that are titled and registered in your own name.

Texas issues six independent GDN classes — Independent Motor Vehicle (used cars and trucks), Independent Motorcycle, Travel Trailer, Trailer/Semitrailer, Wholesale, and Independent Mobility. Which class you pick decides whether the course and the bond apply to you, so settle that before you spend anything.

What Texas Actually Requires

• GDN application ($700, two years) — filed online through TxDMV eLICENSING. Renewals can be submitted up to 90 days early.
• $50,000 surety bond — required for every GDN class except travel trailer and trailer/semitrailer. The bond runs two years and the business name on it must match your application exactly.
• 6-hour pre-licensing course — Independent Motor Vehicle GDN only; motorcycle, trailer, wholesale, salvage, and franchised dealers are exempt. Course price is capped at $150, it’s one-time, and TxDMV lists exactly two approved providers.
• Premises that pass TAC §215.140 — display space for at least 5 vehicles of your licensed type, used only for inventory; retail hours of at least 4 days/week, 4 consecutive hours; wholesale 2 weekdays, 2 hours. TxDMV publishes a premises checklist.
• In-house financing? Separate license. Buy-here-pay-here financing requires a sales finance license from the Office of Consumer Credit Commissioner — not TxDMV.

What It Costs

Item	Cost	Term
GDN license (per category)	$700	2 years
Surety bond (penal sum $50,000)	Premium varies by credit	2 years
Pre-licensing course (independent MV only)	Capped at $150	One-time
Texas LLC (Certificate of Formation)	$300	One-time

How to Get Licensed, In Order

1. Form the entity with the Texas Secretary of State ($300 LLC). The GDN application and bond are issued against this exact name.
2. Take the 6-hour course if you’re applying for an Independent Motor Vehicle GDN — upload the certificate in eLICENSING.
3. Secure premises that meet §215.140 (5-vehicle display area, exclusive use, required hours) and photograph everything on the checklist.
4. Buy the $50,000 bond from a surety, matching the entity name.
5. Apply in eLICENSING ($700) with the bond, certificate, premises documentation, and owner IDs.

After You’re Licensed — the Part Nobody Warns You About

Texas expects a licensed dealer to actually deal: sell or assign fewer than 5 vehicles per calendar year and TxDMV can revoke the GDN. Within 30 days of your license going active you must set up Vehicle Inventory Tax accounts with your county tax office and appraisal district — then file monthly VIT statements and an annual declaration even in months with zero sales. Every sale must be processed through TxDMV’s webDEALER system, with titles transferred within 20 business days on cash sales (45 calendar days if you financed it in-house).

Frequently Asked Questions

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

Fewer than five per calendar year — and only vehicles of the same type that are owned and registered in your name (Transportation Code §503.024). Flipping cars you never titled to yourself is not exempt at any number. Selling five or more, or selling vehicles not registered to you, requires a GDN.

How much does a Texas dealer license cost?

$700 per GDN license category for a two-year license, plus a $50,000 surety bond (premium depends on your credit) and, for independent motor vehicle dealers, a 6-hour pre-licensing course capped at $150. Travel trailer and trailer/semitrailer dealers are exempt from the bond.

Is the dealer education course required for every Texas GDN?

No. The 6-hour pre-licensing course applies only to the Independent Motor Vehicle GDN. Motorcycle, travel trailer, utility trailer, wholesale, salvage, and franchised dealers are exempt. Only two TxDMV-approved providers exist, and the course may not cost more than $150.

What are the premises requirements for a Texas dealership?

Under TAC §215.140 your location needs display space for at least five vehicles of the licensed type, reserved exclusively for inventory — no customer parking, employee parking, or storage. Retail dealers must be open at least 4 days a week for 4 consecutive hours; wholesale dealers at least 2 weekdays for 2 consecutive hours.

Forming the company, taxes, insurance, and hiring are covered in our full guide to starting a business in Texas.

Sources

Source	What It Covers
TxDMV — Independent (GDN) License	License classes, bond requirement, eLICENSING
TxDMV — Dealer Education Requirements	6-hour course, who must take it, $150 cap, approved providers
Tex. Transp. Code §503.024	Fewer-than-five exemption and its titled-in-your-name condition
TxDMV premises checklist (LF628)	TAC §215.140 location, display, and hours rules

Comparing states? See our dealer license guides for every state we cover.