People often ask about how to open a dealership in Texas or how to get a dealers license to sell cars so we put together this handy guide on the process. Be sure to read about each type of independent dealers license to make sure you understand what you will need. The fee for a new GDN license is $700.00 for each license category for which an application is submitted.

Texas divides car dealers into different types. Each type would require a different application from an interested individual. Here is how the Texas Department of Motor Vehicles defines the Independent GDN License:

A GDN is the basic dealer license that allows a person to buy, sell or exchange the type of used vehicle for which the GDN is issued. GDN licenses are divided into several categories. When applying for license, you must select one of the independent license types on the application. If you wish to have multiple types, you may submit multiple applications. Independent Motor Vehicle – May buy, sell, or exchange any type of used cars, trucks, motor homes, and neighborhood vehicles. May use dealer’s temporary tags, buyer’s temporary tags, and metal dealer license plates on motor vehicles only. Must provide a bond. Independent Motorcycle – May buy, sell, or exchange any type of used motorcycles, motor scooters or ATVs. May use dealer’s temporary tags, buyer’s temporary tags, and metal dealer license plates on motorcycles, motor scooters or ATVs only. Must provide a bond. Travel Trailer – May buy, sell, or exchange used travel trailers. May use dealer’s temporary tags, buyer’s temporary tags, and metal dealer license plates on travel trailers only. Exempt from the security requirement. Trailer/Semitrailer – May buy, sell, or exchange new or used utility trailers and/or semitrailers. May use dealer’s temporary tags, buyer’s temporary tags, and metal dealer license plates on trailers/semitrailers only. Exempt from the security requirement. Wholesale Dealers – sell or exchange vehicles only with other licensed dealers. Are NOT required to have a five-vehicle display area. May NOT sell vehicles to retail purchasers. Wholesale vehicle dealers may buy, sell, or exchange used vehicles, including motor vehicles, motorcycles, and travel trailers. May buy, sell, or exchange new or used trailers and/or semitrailers. May use temporary tags and metal dealer license plates. Must provide a bond. Wholesale Motor Vehicle Auction – May offer vehicles for sale by bid only to licensed dealers at a bona fide auction at a permanent location. Must provide a bond. May not make facilities or GDN available to any other person for the purpose of the sale or auction of vehicles. May be issued only one wholesale motor vehicle auction GDN for a particular location. May be issued a regular motor vehicle GDN for a location that has been issued a wholesale motor vehicle auction GDN. Independent Mobility Motor Vehicle Dealer License – allows a dealer to offer to sell new mobility motor vehicles. A “mobility motor vehicle” is a motor vehicle designed and equipped to transport a person with a disability.

Typically, most people would likely be interested in the Wholesale Dealers license. While this does not allow one to sell directly to consumers at a physical car lot, it allows buying and selling between other licensed dealers and would grant access to dealer car auctions in Texas. Dealer only auctions are a great opportunity to buy cars that may not be available to the general public. These dealer auctions often have large inventories and move at a much faster pace than a public car auction.

If you are interested in selling to retail customers at a car lot, you will need the Independent Motor Vehicle type and this will also require a $25,000 car dealer surety bond. Surety bonds are required by the state of Texas for certain license types but you need to obtain one from a third-party. There are many bond companies around Texas to choose from and the cost will vary based on your personal history. Most locations will give you a free estimate on the price of a surety bond for a dealers license. This type will also allow you to use a dealer tag in Texas. Dealer plates are very useful for transporting cars bought at auctions legally on the road.

See Also: Information for Car Dealers at Texas DMV Website