Texas Dealer License Requirements
Any person who wants to engage in the business of buying, selling or exchanging motor vehicles as a dealer in the state of Texas needs to apply for a Texas auto dealer license.
On the application they will receive a distinguishing number issued by the Motor Vehicles Division. This is popularly referred to as GDN (General Distinguishing Number). If the person wants to sell new motor vehicles, they must acquire a franchise dealer license in addition to the GDN.
The GDN is the basic dealer license that enables a person to buy, sell or exchange any type of used vehicle for which the number has been issued. The GDN licenses are available in many categories and you need to make the choice during the application of a new license. During the application process you can choose one individual license type or apply for multiple license types. If you want to choose multiple types, you may have to submit multiple applications.
License Types
Independent Motor Vehicle � Buy, sell and exchange any type of used ATVs, motorcycles and motor scooters. May also sell neighbourhood vehicles. Buyer�s temporary tags, dealer temporary tags, dealer license plates on motor cycles only may be used. Bond needs to be provided. Get Bonded Now.
Independent Motor Cycle � Buy, sell and exchange used ATVs, motorcycles and motor scooters. Buyer�s temporary tags, dealer temporary tags, dealer license plates on ATVs, motor scooters and motor cycles only may be used. Bond needs to be provided. Get Bonded Now.
Travel Trailer � Buy, sell and exchange used travel trailer. Buyer�s temporary tags, dealer temporary tags, dealer license plates on travel trailers only. Security requirement is exempted.
Trailer or Semitrailer � Buy, sell and exchange used travel trailer and semitrailer. Buyer�s temporary tags, dealer temporary tags, dealer license plates on travel trailers and semitrailers only. Security requirement is exempted.
Wholesale Dealers � Sell and exchange vehicles only with other licensed dealers. A five vehicle display area is not required. Vehicles cannot be sold to retail purchasers. Wholesale vehicle dealers may buy, sell and exchange used vehicles (motor vehicles, motor cycles and travel trailers, used trailer and semitrailer). Metal dealer license plates and temporary tags may be used. Bond needs to be provided. Get Bonded Now.
Wholesale Motor Vehicle Auction � Vehicles can be sold by bid only to licensed dealers. This needs to be done at a permanent location in a bona fide auction. Bond to be provided. GDN should not be made available to any other person for the purpose of auction of vehicles. The GDN may be issued for only one particular wholesale auction at a specified location. A regular motor vehicle GDN may be issued for a location for which a wholesale GDN has been issued. Get Bonded Now.
Independent Mobility Motor Vehicle Dealer License � This license allows the dealer to sell new mobility motor vehicles. This is a motor vehicle that is designed to transport a person with disability.
Now that you have gained knowledge about the different license types, you need to understand how the application process works. Each license type has detailed information about the documents required to apply for each one of them. All licenses are issued for a period of two years and are not transferable to any other dealer.
Understanding the Different Types of Texas Auto Dealer Licenses
The total GDN fee is $700.00. The fee for dealer license plate is $90.00. You need to specify the number of metal dealer license plates you require. There is a limit to the number of metal dealer license plates you can order.
You can apply for the metal dealer license plates with a new application, renewal and any time during the license period. You can choose to make the payment using a credit card. The renewal fee for each GDN is $400.00 and for each dealer license plate is $90.00.
If you are planning to relocate to a location that is outside the city limits of the existing location, you may have to make a new application for the license. Relocation of any type has to be conveyed to the licensing authorities so that changes are made to the license.
Documents Attached to Application
Ownership information
Proof of identity � A photo copy of the current driver�s license of owner of the dealership or managing partner of the dealership. If it is a general partnership, then the driver�s license of each partner has to be submitted. Apart from this you may also submit a valid passport or any state issued identification card.
Assumed name certificates � These certificates need to be issued by proper authorities. The Texas Secretary of State is the proper authority for issuing assumed name certificates for corporations, LLCs, LLPs and LP. For general partnership and sole proprietor, it is the county clerk in the county in which the dealership is situated. The assumed name on the application must match with the assumed name that you have registered.
Certificate of incorporation or partnership
Auto dealer surety bond � GDN types (motor vehicle dealer, motorcycle dealer, wholesale only dealer, wholesale motor vehicle auction, independent mobility vehicle dealer) that are not licensed as a franchise dealer need to submit an auto dealer bond of $25,000.00. The car dealer surety bond has to be supported by a power of attorney from a surety company. A separate auto dealer bond is required for each category of license. Get Bonded Now.
When submitting theauto dealer surety bond along with the application, you need to ensure that the surety bond is on forms that matches the approved sample in the package. The business name that is to be on the GDN must be shown on the bond. The information provided on the bond must match exactly with that of the license application. This includes the address.
The auto dealer bond must be issued for at least 2 years and must expire on the last day of the month. This should correspond with the dealer license expiration date. The lease cannot end prior to the bond expiration. The bond must be signed and dated by both the dealer and bonding agent. All required signatures need to be there on the bond.
If there are any kind of typographic errors or misspellings it can invalidate the bond. It needs to be corrected with a rider and power of attorney. If additional locations are applied for, then the address of all these locations must be on the bond.
Application Process
After the application is received it is processed by finance for fees. The Texas Comptroller of Public Accounts processes money orders and checks. The credit card payments are processed by TxDMV Motor Vehicle Division. If the fee is not processed, the license is not approved. The fee process is the first step to issue a Texas car dealer license.
The application is then scanned into the licensing system and a work item number is allotted. Email conformation is sent by the licensing system providing item work number and other basic details. The application is then reviewed with the information that has been provided. If there are any type of deficiencies more information is sought.
The licensing specialist may call or mail you about the list of deficiencies in the application and how they need to be corrected. The deficiencies need to be corrected and relevant documents submitted. This will be checked once again before sending the GDN to the mailing address mentioned in the application form.
Dealer License Renewal
The term of each license is two years. The licensing authorities will send a notice 75 � 90 days prior to expiration. The renewal notice needs to be returned with relevant documents along with the proper fees at least 45 days before the license expiration. The responsibility of maintaining the license is with the dealer and if they do not receive a notice they need to contact the licensing authorities.
One of the important things that you need to remember is that there is no grace period for renewal of license. After the license expires you may not be able to sell and exchange any type of vehicle. The dealer plate also expires with the license. Dealers sending renewal forms after expiration of license may have to pay penalty for renewal. The penalty fee is 50% of the total license fee. The renewal process has to be completed within 90 days or you may have to apply for a new license.
Dealers are advised to provide good contact numbers in the license application or renewal forms so that the licensing authorities can contact them immediately for any kind of additional information. It is best to review the application form and the documents attached before sending them for processing. The name, dates and addresses on the bond should be entered correctly.
If you are uncertain about any of the documents to be submitted or any other aspect of the application, it is best to talk with the licensing authorities so that you are able to make a proper submission. This can ensure quick processing and you may be able to get your Texas car dealer license fast.