Texas Used Car Dealer License Requirements

5 Easy Tips on How to Get a Dealers License in Texas

If you want to get your used car dealer license in Texas make sure that your application will be accepted the first time you submit it, be extra careful when filling in the form itself, and when preparing the documents that accompany it. Everything is done online of course. No paper! Verify that you are giving your correct phone number and address, so that TxDMV can contact you .

First step is find a suitable location for your business. To quickly get you Texas Used Car Dealer License, you must determine whether local zoning regulations allow you to operate a used car dealership on the site. The application must include documentary proof that you hold a lease on the property or own it outright.  Additionally, you must include photographs, maps and physical measurements of the site. Shoot the photographs as instructed in the application.

The usual documents that are required along with your Texas Used Car Dealer License application are:

• Proof of an established and permanent business location (proof of lease or ownership), that is compliant with local zoning and equipped with a permanent business sign. It should have space for at least five vehicles of the type that you want to deal with.
• Certificate of Incorporation, Organization or Partnerships to prove the legality of the entity applying for a license.
• If your company is a partnership, corporation, limited liability company or limited partnership, you have to provide your Employer Identification Number (EIN), obtained from the Internal Revenue Service, on your application form.
• For most types of licenses, you need to submit a surety bond in the amount of $25,000. The bond should cover a period of two years that matches the dates of the license duration.

source~https://www.bryantsuretybonds.com/blog/how-to-get-a-dealers-license-in-texas

Do you need a license? Here is a quick way to tell. If you  who sells 5 or more vehicles in a calendar year you need one. If you sell one or more vehicles not owned, titled and registered in your name, you need one. So lets go further into what you need to understand as it relates to your Texas Used Car Dealer License Requirements.

A person may sell up to four vehicles per calendar year without a license, provided they are all titled and registered in his name. So if you want to make money  in the car business buying and selling cars in Texas, this is how you do it.

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If you want your Texas Used Car Dealer License,  you must know that starting March 2017, the Texas DMV replaced its paper-based licensing system with eLICENSING. You can now apply, renew, or amend your motor vehicle dealer license online. To receive email updates regarding eLICENSING, visit www.TxDMV.gov/subscribe and check the box beside the Dealers and Manufacturers subscription topic.

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.

These are the two that you would most likely choose from:
Independent Motor Vehicle – May buy, sell, or exchange any type of used cars, trucks, motor homes, and neighborhood vehicles. Are required to have a five-vehicle display area. May use dealer’s temporary tags, buyer’s temporary tags, and metal dealer license plates on motor vehicles only. Must provide a bond.

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.  

source~http://www.txdmv.gov/dealers/licensing/elicensing-resources

Get your GDN through the eLICENSING portal.

You might need to get more than one GDN.

Questions arise as to when a dealer needs an additional GDN. The following are some examples that a dealer would need to obtain more than one license/GDN:

• Franchised dealers need a franchise license in addition to the GDN.
• Franchised dealers must obtain a separate franchise license for each location that new motor vehicle sales are made.
• Dealers who own dealerships in different cities.
• Franchised or independent dealers who wish to sell different types of vehicles (i.e. a motorcycle dealer who wishes to sell trailers as well).

You will need a surety bond to business:

A TX Auto Dealer Bond is a type of surety bond that protects your customers from fraud or misrepresentation during a business sale. It is a requirement to get your Texas Auto Dealer License.

The bond amount is set at $25,000.

You won’t have to pay the full bond amount to get bonded. You will just pay a small-one time fee that is based largely on your personal credit score.

Exceptional credit score rate: $250

Bad credit score rate: $1,000 – $3,750

source ~http://blog.suretysolutions.com/suretynews/how-to-get-your-texas-dealer-license

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