Texas Dealer License Training

7 Steps to a Texas Dealers License
TxDMV Dealer License Training
Updated February 2024

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7 Steps to Obtain a Texas Dealer License (General Distinguishing Number)

1. Take Online Dealer Educational Course

2. Must Have A Location

3. Apply For Employer Identification Number

4. Register with Secretary of State or County

5. Obtain Dealer Surety Bond

6. Submit Application Through eLICENSING

7. Maintain Business Hours Records

1. Dealer Educational Course

Many persons applying for a Texas Dealer License or General Distinguishing Number (GDN) for the first time must take a six-hour web-based dealer educational course. The course is required if selling cars, trucks, motor homes, neighborhood electric vehicles, recreational off-highway vehicles, atvs, and utvs. The course must be taken by an owner or manager that is listed on the application. The Automobile Dealer Training Association's Dealer Pre-License Course is approved by the Texas Department of Motor Vehicles and meets the State of Texas' 6 hour dealer educational requirement. Click here to enroll now or read our Course Reviews!

Most dealers that were licensed as a Texas Dealer License for the first time after September 1, 2009 must take a three-hour web-based Texas Dealer License educational course.

You will receive an Official Certificate of Completion at the end of this course. Be sure to upload the certificate in with dealer license application submission. When you complete your online training, you will be confident and prepared to operate a licensed Texas dealership.

2. Business Building With Sign and Display Lot

You must have a place of business to gain a Texas Dealer License. The building must meet all local zoning requirements and include an office for the operation of your dealership. If the office is at a private residence, it must be completely separate from the actual residence and meet zoning requirements from that city or county. Your office must include, at minimum, a desk, two chairs, internet access, and a working telephone listed in your dealership name.

If a Texas dealer shares their location with another business, each dealer must have their own office area. The dealer must either own the property where the license is located or lease it for the entire term of the dealer’s license. The law requires you to display your dealer license.

You must have a display lot either inside or outside the building with sufficient space to show five of the vehicle types you are selling. The display lot must not be a driveway and must be a hard surface such as concrete or gravel. Some local zoning ordinances may require you to pave the area.

As with the building, the lot must meet all local zoning requirements. If a dealer operates at night, the display area must be illuminated. Wholesale vehicle dealers are exempt from some display area requirements. You will learn more in your dealer course.

The State allows up to four retail dealers and up to eight wholesale dealers to operate out of one business building. Retail dealers and wholesale dealers in Texas may never share the same building they must operate in separate dealer buildings. You will need a permanent business sign which is visible from the public roadway. The dealership name must be at least six inches tall or larger, and the sign must be permanent and clearly visible to the public. Wholesale dealers must have the sign mounted on or next to the office door with the business name in at least two-inch letters. Be sure the letters in the dealership name meet the minimum height requirements under Texas law. We cover the building, sign, and display specifications more extensively in your online training course.

3. Employer Identification Number (EIN)

Before submitting your dealer application, many persons must obtain an Employer Identification Number (EIN). This number identifies your new business, and you will need it for tax purposes. Securing this number is a quick and easy step, which only takes a few minutes. You can apply online and have your new Employer Identification Number in a matter of moments. Once you have received your EIN, be sure to include it on your dealer license submission. We will cover the EIN registration extensively in the course.

4. Register Business Name with Texas Secretary of State or County

Most dealers must register their business name with the Texas Secretary of State, which must record every business operating in the state. Registering your business with the Secretary of State is covered in great detail in your dealer training course. Certain business entities will only register with the county in which they are located. We will walk you step by step through the simple registration process.

5. Dealer Surety Bond

Most dealers in TX must secure a $50,000 dealer surety bond to get a Texas Used Motor Vehicle Dealer License. With good credit, you should get a $50,000 dealer surety bond for $200 to $350 per year. If you have a couple of blemishes on your credit score, the price can be much higher. Franchised dealers, travel trailer dealers, and utility/semitrailer dealers are exempt from the surety bond requirement. We cover dealer bonds in depth in your dealer license training.

6. Submit Application Through eLICENSING

You must submit your Texas dealer license application online through the Texas Department of Motor Vehicles’ eLICENSING system. Applications are no longer mailed. Submit your dealer license application at the TxDMV website. The application process is quite extensive and must be completed correctly and in its entirety. Mistakes on your dealer application can cause significant delays in your licensing process. While the TxDMV is reviewing your dealer license application you will be directed to obtain fingerprints from IdentoGO. Step by step fingerprint instructions will be sent to you after you apply for your license. We will submit a dealer license application online in your dealer training course and ensure you know how to apply correctly for quicker approval.

7. Maintain Business Hours and Records

A retail Texas dealer must be open at least four days a week for at least four consecutive hours per day. A wholesale dealer must be open at least two days per week for at least two consecutive hours per day. Travel trailer and trailer/semi-trailer dealers may operate seven days a week. If a person holds a motor vehicle license and a trailer license, they may open on Saturdays and Sundays but cannot sell motor vehicles on both Saturday and Sunday. Motor vehicles may only be sold on Saturday or Sunday, never on both days. We will discuss hours of operation extensively in your six-hour web-based dealer license class. You must also maintain records on all vehicles purchased, leased, and sold, for a minimum of 48 months. Just copy every document that comes across your desk. We will review an entire section on exactly which records to keep in your course.

You Must Follow all State and Federal Laws

In your Texas dealer license training course, we will show you how to comply with all state laws that come out of Austin and all federal laws that come out of Washington. If you follow every state and federal law, you will achieve much higher profits. If you maintain 100 percent compliance, you will maintain 100 percent profits. The Texas Department of Motor Vehicles is basically giving you a license to make as much money as you can, as long as you are following ALL the rules. In your Texas Dealer License course, we will show you how easy it is to follow all the rules.

Click here to view more information on How to Get a Dealer License in Texas

How to Get a Texas Dealer License Long Version

Types of Texas Dealer Licenses

Retail General Distinguishing Number Retail GDN licenses are the basic Texas dealer licenses which allows a person to buy or sell used motor vehicles and are broken down into 5 categories. GDN licenses are issued for two-year terms. If you want to sell vehicles from multiple categories you will need to have a license for each category.

Motor Vehicle Dealer License

A Texas motor vehicle GDN or what is known as a used dealer license, allows you to sell used cars, usedtrucks, used motor homes, used neighborhood electric vehicles, usedATV’s, and used recreational off-road vehicles. The license allows you to sell vehicles retail to customers on the lot, or wholesale directly to other dealers or through dealer only auctions. Requires 6-hour training course before applying. All independent motor vehicle GDN licensetypes (excludes wholesale, wholesale auction, and Independent MobilityMotor Vehicle Dealers (IMMV) may operate as a salvage dealer withouta separate salvage license as long as you operate only at the samebusiness location for which the GDN license is issued. A Sales & UseTax Permit, Sales Tax ID number, and NMVTIS number is also required if operating as a Salvage dealer.

Motorcycle Dealer License

A Texas motorcycle GDN allows you to sell used motorcycles,used mopeds, ATV’s, ROV’s UTV’s, and used autocycles.

Travel Trailers Dealer License

A travel trailer GDN allows you to sell used traveltrailers. A travel trailer is defined as a house trailer-type vehicle or acamper trailer that is a recreational vehicle or that is less than eight feetsix inches in width or 45 feet in length, and is designed primarily for useas temporary living quarters in connection with recreational, camping,travel, or seasonal use it is not a permanent dwelling; and is not a utilitytrailer, enclosed trailer, or other trailer that does not have humanhabitation as its primary function.

Trailer/Semitrailer Dealer License

A Texas trailer/semitrailer GDN license allows you to sell new orused utility and semitrailers. This is the only GDN category which allowsyou to sell brand new vehicles without a franchised dealer license.

Independent Mobility Motor Vehicle Dealer License

An independent mobilitymotor vehicle GDN allows you to new and used vehicles which have converted to transport persons with a disability.

Steps to Obtain a General Distinguishing Number (GDN) or Texas Dealer's License

1. Submit Dealer Application at eLICENSING

You must submit your dealer application through the TxDMV eLICENSING website. Your application must be submitted online. The TxDMV no longer accepts dealer license applications by mail. You may submit your dealer license application at www.TxDMV.gov and scroll down on the home page and click on eLICENSING login to begin.

The application process for a dealer license in Texas is quite extensive and must be completed correctly and in its entirety. Mistakes on your dealer application can cause significant delays in your licensing process. If you need assistance during the eLICENSING process you may call 888-368-4689. We will submit a dealer license application online in your dealer training course.

2. Criminal History

Before you receive your dealer license from the TxDMV the TxDMV must review your criminal history and the criminal history of all owners and managers listed on the license. ALL owners and managers MUST disclose all prior offenses – both convictions and those that resulted in deferred adjudication in any jurisdiction. After you apply for your dealer license through eLICENSING, you will be notified to report to IdentoGO for your required fingerprints. Do not report to your fingerprint location until you are directed to by the TxDMV.

3. Business Building

You must have a place of business to be used for the purpose of selling motor vehicles.  The building must meet all local zoning requirements. You must have an office in the building for the operation of your dealership.

Before you rent or purchase a building to obtain a Texas dealer license you must contact your local planning and zoning office at your city hall or county courthouse to ensure you may operate a dealership at that location. TxDMV Enforcement Officers may request documentation to ensure all zoning requirements have been met.

4. Display Area

You must have a display area has sufficient space to display 5 of the vehicle types that you will be selling as a dealer in Texas. The display lot can be outside or inside the building that you own or lease.
You vehicle inventory must be kept separate from any other customer parking.

All retail sales activity must take place at the licensed location only. You are not allowed to have offsite retail sales activity. Wholesale vehicle dealers do not need a display lot.

5. Business Sign

You will need a permanent business sign which is visible from the public roadway. The dealership name on the sign must be at least 6 inches or larger. Most printing companies can produce a permanent business sign at minimal costs.

Each dealer must post their own business hours if they are sharing a business with other licensed Texas dealers. Be sure the letters in the dealership name meet the minimum height requirements under Texas law.

6. Business Hours

A retail dealer must be open at least 4 days a week for at least 4 consecutive hours per day. A wholesale dealer must be open at least 2 days per week for at least 2 consecutive hours per day.
BBusiness hours must be posted at the front of the building. You may post your business hours on the front of the building, on a window, or on the business sign.
The dealership must be open and staffed during the posted hours of operation.

Texas Blue Law prohibits a motor vehicle dealers from selling vehicles on Saturday and Sunday. A dealer may choose to be open on a Saturday or Sunday but not both. Travel trailer and trailer/semitrailer dealers may operate 7 days a week. If a person holds a motor vehicle license and a trailer license, they may open on Saturdays and Sundays but cannot sell motor vehicles on Saturday and Sunday. Motor vehicles may only be sold on a Saturday or Sunday, never on both days.

7. Texas Dealer Surety Bond

Most persons must obtain a $50,000 dealer surety bond in order to obtain a Texas Used Motor Vehicle Dealer's License.

Dealer surety bond pricing is based on your credit score and can be obtained by an insurance agent or bonding company.

8. Register Business Name with Texas Secretary of State or Countybr>
Many dealers must register the business name with the Texas Secretary of State and include copies of each registration with your dealer application. The Texas Secretary of State wants to have a record of every business which is operating the in the state. Sole Proprietors & General Partnerships are excluded, however, Sole Proprietors and General Partnerships must file a DBA/Assumed Name Certificate in any county they operate if they are using a name other than their proper name.
RRegistering your business with the Secretary of State is covered in great detail in your Texas dealer license training course. For additional information on registering your business you may contact the Texas Secretary of State Business & Commercial Section via email at corpinfo@sos.texas.gov or call them at 512-463-5555.

9. Licensing with Office of Consumer Credit Commissioner if Financing

Any dealer that offers assistance with any type of financing must be licensed with the Texas Office of Consumer Credit Commissioner. You can obtain the license at www.occc.texas.gov or you may call 512-936-7600 for further information. We will cover licensing with the Office of Consumer Credit Commissioner extensively in the course.

110. Records

You will be starting a very large paper trail when you obtain a Texas dealer license. You must keep all records for a minimum of 48 months. The current and previous 13 months of records must be kept at the dealer’s licensed location to be ready for inspection by a TxDMV representative. The remaining 35 months records can be stored at a location other than the licensed location.

Records may be stored either via paper or electronically for a period of at least 4 years. Federal laws require some records be kept at least 5 years. We will review an entire section on exactly what records to keep in your dealer training course.

11. I-9 Employment Eligibility Verification

The Employment Eligibility Verification Form I-9 is a U.S. Citizenship Immigration Services form. It is used by an employer to verify an employee's identity and to establish the worker is eligible to accept employment in the United States. You can find the form at www.uscis.gov . Federal law requires you to complete this form for every person whose name appears on the dealer license and all future employees. You do not need to submit this form with your application but you must store a copy of the form at the dealership location.

12. Employer Identification Number (EIN)

Before submitting your dealer application, most persons must obtain an Employer Identification Number which is also known as an EIN. This number is used to identify the new business you are starting and will be needed for tax purposes.
Obtaining this number is a very quick and easy step which will only take a few minutes. You can easily apply at http://www.irs.gov   and have your new Employer Identification Number in a matter of moments.

If a Sole Proprietor has employees, then an EIN is needed and may be used. SSNs may be used if the Sole Proprietor is the only employee of the dealership.
Applying for an Employer Identification Number is covered extensively in the course.

13. Dealer Educational Course

Many persons applying for a Texas Independent Motor Vehicle GDN Dealer License for the first time are required to take a 6-hour web-based dealer educational course. The training is required if you are selling cars, trucks, motor homes, neighborhood electric vehicles, recreational off-highway vehicles (ROV), all-terrain vehicles (ATV), and utility vehicles (UTV). The person taking the course must be an owner or manager listed on the application. You will receive a Certificate of Completion at the end of this course. Be sure to upload the certificate in your dealer application submission.

14. License Fees

The fees for your General Distinguishing Number (dealer license) are listed below. Your license fees can be paid with credit card or eCHECK. This example shows fees which include one optional metal plate:
General Distinguishing Number
$700.00
Metal Dealer Plate
$90.00
Subtotal
$790.00
Additional Plate $90.00 (optional)
$90.00
Grand Total
$880.00

TEXAS LAW REQUIRES ALL DEALER LICENSES ARE DISPLAYED PROMINENTLY AT THE BUSINESS LOCATION