# How to start a used car dealership in Texas > Start a used car dealership in Texas in 13 steps: city approval, the 6-hour course, a $50,000 bond and a $700 GDN application. Costs and timing included. - Canonical URL: https://www.leftlanesoftware.com/blog/how-to-start-a-used-car-dealership-in-texas - Language: en-US - Spanish version (Español): https://www.leftlanesoftware.com/blog/como-abrir-un-lote-de-autos-usados-en-texas - State: Texas - Topic: Starting a dealership - Last verified: 2026-11-09 _Last verified: November 9, 2026. Every rule links to its official source._ To start a used car dealership in Texas you need a general distinguishing number (GDN), the dealer license issued by the Texas Department of Motor Vehicles (TxDMV). Plan on a location your city approves for vehicle sales, a 6-hour course, a $50,000 dealer bond and a $700 application fee per category. Financing your own customers adds a license from the OCCC, the Office of Consumer Credit Commissioner. ## Texas at a glance | What | The rule | Source | | --------------- | ------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------- | | License | Independent motor vehicle GDN, issued by TxDMV through its eLICENSING system | [TxDMV: independent GDN](https://www.txdmv.gov/dealers/licensing/independent-gdn) | | Main exemption | Selling or offering fewer than five vehicles of the same type in a calendar year, all owned and registered in your name | [Transportation Code 503.024](https://statutes.capitol.texas.gov/Docs/TN/htm/TN.503.htm) | | Application fee | $700 per GDN category, covering the 2-year term | [TxDMV eLICENSING user guide](https://www.txdmv.gov/sites/default/files/body-files/eLICENSING-UserGuide_Independent-GDN-Licensees.pdf) | | Dealer bond | $50,000 surety bond for a 2-year term | [Transportation Code 503.033](https://statutes.capitol.texas.gov/Docs/TN/htm/TN.503.htm) | | Course | At least 6 hours online, priced at no more than $150 | [43 TAC 215.161](https://www.law.cornell.edu/regulations/texas/43-Tex-Admin-Code-SS-215-161) | | Premises | An office of at least 100 square feet with a 7-foot ceiling, display space for five vehicles, open at least 4 days a week | [43 TAC 215.140](https://www.law.cornell.edu/regulations/texas/43-Tex-Admin-Code-SS-215.140) | | Processing time | 84 days on average in fiscal year 2025, against a 30-day target | [TxDMV FY 2025 Chairman's Report](https://www.txdmv.gov/sites/default/files/report-files/FY-2025_Chairmans_Annual_Report.pdf) | ## Which agencies will you deal with? You will deal with up to seven offices. The city comes before TxDMV, and the county offices come right after the license. | Who | What they grant or collect | | ------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | [TxDMV](https://www.txdmv.gov/dealers) | The GDN, dealer plates, webDEALER and ePLATE for titles and plates, and premises and plate reviews | | Your city | Zoning, the certificate of occupancy or other official proof the site is approved, and sign permits where required | | County tax assessor-collector | Title applications with the sales tax, [webDEALER access](https://www.law.cornell.edu/regulations/texas/43-Tex-Admin-Code-SS-217.74), and the [monthly inventory tax statement](https://statutes.capitol.texas.gov/Docs/TX/htm/TX.23.htm) with its prepayment | | County appraisal district | The annual inventory tax declaration | | Texas Comptroller | The [Seller-Financed Sales Tax Permit](https://comptroller.texas.gov/taxes/publications/96-254/seller-financed-sales.php) and its returns, only if you finance sales yourself | | [OCCC](https://occc.texas.gov/industry/motor-vehicle-sales-finance-mvsf) | The motor vehicle sales finance license, if you finance sales yourself or sign finance contracts as the seller and assign them | | Secretary of State or county clerk | Your entity filing and any [assumed name certificate](https://www.law.cornell.edu/regulations/texas/43-Tex-Admin-Code-SS-215-133) | ## How will you sell: cash, outside lenders or your own financing? Decide this first, because it sets which licenses you need. - **Cash.** The buyer pays the full price at the sale. The GDN covers you. - **Outside lenders.** If you sign a retail installment contract as the seller and assign it to a bank or finance company, the OCCC says you need its license, even when you assign every contract right away ([OCCC Bulletin B23-1](https://occc.texas.gov/wp-content/uploads/2025/11/b23-1-mvsf-licensing-requirements.pdf)). - **Your own financing (buy here pay here).** [The OCCC says](https://occc.texas.gov/industry/motor-vehicle-sales-finance-mvsf) a sale may be considered financed when the buyer pays over time, even with no interest. You need the OCCC license and the Comptroller's permit. A wholesale GDN is the other option: you may sell or exchange vehicles only with other licensed dealers, and you need no five-vehicle display area and no pre-licensing course. You can never sell to the public on it. ## How do you start a used car dealership in Texas, step by step? Work through these 13 steps in order. The city's approval and the finished premises come before the application; fingerprints come after it. The [Texas dealer license checklist](/blog/texas-dealer-license-gdn-step-by-step) puts every form, fee and office on one page, and the [step-by-step GDN guide](/blog/texas-dealer-license-gdn-step-by-step) covers steps 2 to 12 in detail, as its Steps 1 to 11. 1. **Decide how you will sell.** Retail or wholesale only; cash, outside lenders or your own financing. The answer sets your GDN type and whether step 13 applies. 2. **Form the business and register the name.** TxDMV wants any Secretary of State certificate and each assumed name certificate ([43 TAC 215.133](https://www.law.cornell.edu/regulations/texas/43-Tex-Admin-Code-SS-215-133)). Sole proprietors and general partnerships file assumed names with the county clerk, other entities with the Secretary of State ([TxDMV user guide](https://www.txdmv.gov/sites/default/files/body-files/eLICENSING_User_Guide_for_New_Independent_GDN_Licenses.pdf)). 3. **Find a location that can meet the premises rule, and confirm zoning before you sign the lease.** The office must be in a permanent building open to the public, never a residence or virtual office ([43 TAC 215.140](https://www.law.cornell.edu/regulations/texas/43-Tex-Admin-Code-SS-215.140)). TxDMV accepts a two-year lease, or one year with an option to renew for a second ([Form LG100](https://www.txdmv.gov/sites/default/files/form_files/txdmv_LG100.pdf)). See [what to ask the city](/blog/texas-car-lot-city-county-approvals). 4. **Get the city's paper.** TxDMV needs a certificate of occupancy or other official proof that the site meets municipal rules, including zoning, for a vehicle business. It must be in your name or the business's and cover motor vehicle sales. Offices and fees by city are in [the local approvals guide](/blog/texas-car-lot-city-county-approvals). 5. **Set up the office, the sign, the phone and the posted hours.** You need a desk, two chairs, internet, a phone listed in the business name, locked plate storage, and a sign with legible letters at least 6 inches high. Open at least 4 days a week, 4 consecutive hours a day, not by appointment only, with a "be back" sign when nobody is there. 6. **Take the 6-hour pre-licensing course.** One owner or operating manager takes it online, once, for no more than $150. [TxDMV lists the approved providers](https://www.txdmv.gov/dealers/dealer-education). 7. **Buy the $50,000 dealer bond.** This surety bond covers unpaid bank drafts for vehicles you buy and failures to pass good title. It [runs from the first day of a month to the last day of the month two years later](https://www.txdmv.gov/sites/default/files/body-files/eLICENSING-UserGuide_Independent-GDN-Licensees.pdf), in the legal business name the GDN will carry, with your physical address ([43 TAC 215.137](https://www.law.cornell.edu/regulations/texas/43-Tex-Admin-Code-SS-215-137)). 8. **Take the photos and gather the documents.** Six photos (sign, building, display space, office, plate storage, posted hours), the deed or lease, a current ID for each person and a notarized premises affidavit. 9. **Apply in eLICENSING and pay the fees.** The fee is $700 per GDN category. Metal dealer plates are $90 each and dealer temporary plates $10 each ([TxDMV: dealer plates](https://www.txdmv.gov/dealers/dealer-license-plates)). Pay from an account held by the applicant (or its attorney or CPA), or TxDMV withdraws the application. 10. **Get fingerprinted when TxDMV tells you.** This applies to every GDN applicant: owners and the people acting for the business, such as officers, directors, managers and partners. Wait for TxDMV's email naming who must be printed, then use IdentoGO: $40 plus service fees as of October 1, 2026 ([TxDMV: fingerprinting](https://www.txdmv.gov/dealers/fingerprinting)). 11. **Pass the review.** TxDMV [may schedule a site visit](https://www.law.cornell.edu/regulations/texas/43-Tex-Admin-Code-SS-215-133). Answer any deficiency notice within 20 calendar days or the application is treated as withdrawn ([43 TAC 215.83, as amended](https://www.txdmv.gov/sites/default/files/body-files/Chapter_215_Relating_to_Enforceability_of_Motor_Vehicle_Records_Disclosure_Act-_Adopt.pdf)). 12. **Once licensed: webDEALER, plates, county accounts and the first inventory tax declaration.** Each user finishes [TxDMV's webDEALER training](https://www.txdmv.gov/dealers/webdealer) before the county tax assessor-collector grants access, and buyer's plates are ordered in TxDMV's Inventory Management System. TxDMV's startup sheet puts the county steps within 30 days of the license's active date ([Form LP801](https://www.txdmv.gov/sites/default/files/form_files/New_Dealer_Startup_Info_LP801.pdf)). The first inventory tax declaration is due within 30 days of starting business. 13. **If you will finance or assign contracts: the OCCC license, plus the Comptroller's permit if you carry the notes.** Apply to the OCCC through NMLS; it generally has up to 60 days to review ([OCCC licensing](https://occc.texas.gov/industry/motor-vehicle-sales-finance-mvsf/mvsf-licensing-forms)). The license must be in place before your first financed sale, including [a contract you sign as the seller and assign](https://occc.texas.gov/wp-content/uploads/2025/11/b23-1-mvsf-licensing-requirements.pdf). If you finance sales yourself, apply for the Seller-Financed Sales Tax Permit on [Form AP-169](https://comptroller.texas.gov/taxes/motor-vehicle/forms/) at the same time. Details: [Financing your own sales in Texas](/blog/texas-in-house-financing-occc-license). ## What does it cost to start a car dealership in Texas? State fees are fixed. Most other costs are quoted by private companies or set by your city. | Item | Cost | Who sets it | | ------------------------------------------------ | ------------------------------------------------------------------------------------ | --------------------------------------------------------------------------------------------------------- | | GDN application | $700 per category for 2 years ($500 for the first year, $200 for the second) | [State law](https://statutes.capitol.texas.gov/Docs/TN/htm/TN.503.htm) | | Metal dealer plates | $90 each; 2 for a new independent dealer | TxDMV | | Dealer temporary plates | $10 each; up to 25 in a new independent dealer's first term | TxDMV | | GDN renewal | $400 every 2 years | State law | | Pre-licensing course | No more than $150 | The provider, under the rule's cap | | Fingerprints | $40 plus service fees | TxDMV's vendor | | Dealer bond premium | Quoted by the surety | The surety | | Certificate of occupancy and permits | Varies | Your city | | OCCC license, if you finance or assign contracts | $200, $460 and $120 fees on OCCC's checklist updated June 4, 2026, paid through NMLS | [OCCC](https://occc.texas.gov/wp-content/uploads/2026/06/Motor-Vehicle-Sales-Finance-Company-License.pdf) | The GDN application rule lists no insurance policy among the required documents, but a landlord or lender may set its own requirement. The lease and the inventory will cost more than any line above. ## How long does it take to get a Texas dealer license? TxDMV reported an average of 84 days to process a new GDN application in fiscal year 2025 (September 2024 to August 2025), against its own target of 30 days. That is a reported average, not a promise: TxDMV's checklist says processing times vary with application volume, and the city's approval, the course and the bond all come before you apply. ## What do you have to do in your first 90 days? Your first sales start several deadlines at once. - **Plates at the point of sale.** Older materials still describe paper buyer's tags; since July 1, 2025 you issue a metal plate at the sale, file through TxDMV's webDEALER and ePLATE systems, and charge the buyer the $10 plate fee ([43 TAC 215.155](https://www.law.cornell.edu/regulations/texas/43-Tex-Admin-Code-SS-215.155)). Without a webDEALER account you cannot complete a sale. See [After the sale in Texas](/blog/texas-dealer-after-the-sale-deadlines). - **The title deadline.** Texas gives a dealer 30 days from the sale date to file title and registration (45 if you financed the sale yourself) ([43 TAC 215.144](https://www.law.cornell.edu/regulations/texas/43-Tex-Admin-Code-SS-215.144)). TxDMV tells new dealers to file within 20 business days, which is also when the [Tax Code](https://statutes.capitol.texas.gov/Docs/TX/htm/TX.152.htm) says the sales tax is due. Treat 20 business days as your working deadline and 30 days as the limit. - **Sales tax.** The buyer owes [6.25 percent of the total consideration](https://statutes.capitol.texas.gov/Docs/TX/htm/TX.152.htm). On cash and outside-lender sales you collect it and send it to the county with the title application. - **The inventory tax.** Vehicle Inventory Tax (VIT), which most county tax offices and the pre-licensing course call special inventory tax (SIT), has two filings ([Comptroller: VIT](https://comptroller.texas.gov/taxes/publications/96-254/vit.php)). Your first declaration is due within 30 days of starting business. The monthly statement is due by the 10th of every month, even with no sales. See [Texas Vehicle Inventory Tax](/blog/texas-vehicle-inventory-tax-vit-sit). - **Records.** Keep a deal jacket, the per-sale file, for 48 months, the last 13 at the licensed location. Since October 29, 2026 it must hold [your copy of the buyer's license plate receipt](https://www.txdmv.gov/sites/default/files/body-files/Chapter_215_Relating_to_Enforceability_of_Motor_Vehicle_Records_Disclosure_Act-_Adopt.pdf). - **The five-sales minimum.** TxDMV may cancel a GDN held at least 12 months if the dealer assigned fewer than five vehicles in the previous 12 months ([Transportation Code 503.038](https://statutes.capitol.texas.gov/Docs/TN/htm/TN.503.htm)). - **Inspections.** TxDMV's [Dealer Compliance Services Section](https://www.txdmv.gov/dealers/HB718) checks plate and premises compliance. See [Who can inspect a Texas dealership](/blog/who-can-inspect-a-texas-dealership). Your first January brings the annual inventory tax declaration, due by February 1 (file by January 31 to be safe). The [Texas dealer year-end checklist](/blog/texas-dealer-year-end-checklist) lists it with the other dates. ## What trips people up - **Signing the lease before the city says yes.** TxDMV requires the city's proof with the application, so a lease on a site the city will not approve is money lost. - **Getting fingerprinted before TxDMV's email.** TxDMV tells applicants not to go to the vendor until it confirms who must be printed. - **A bond that does not match.** A wrong name or address, the wrong term and missing signatures are common deficiencies on TxDMV's checklist. - **Assuming outside financing needs no OCCC license.** Signing the contract as the seller is enough. Getting the license after it was required costs a $10,000 late filing fee ([Finance Code 349.303](https://statutes.capitol.texas.gov/Docs/FI/htm/FI.349.htm)). - **Selling on both Saturday and Sunday.** State law bars selling or offering a vehicle on consecutive Saturday and Sunday ([Transportation Code 728.002](https://statutes.capitol.texas.gov/Docs/TN/htm/TN.728.htm)). - **Skipping the inventory tax statement in a month with no sales.** A late statement costs $500 for each month or part of a month. ## What changed recently - **November 1, 2026.** Bexar County joined the emissions testing counties, making 18 ([TxDMV](https://www.txdmv.gov/sites/default/files/body-files/2026-09-15_Bexar_County_Emissions.pdf)). - **October 29, 2026.** Amended TxDMV rules let the sign be affixed or etched on an exterior window, wall or door, and replace the barrier around a shared display area with permanent signage ([Texas Register](https://www.sos.state.tx.us/texreg/archive/October232026/Adopted%20Rules/43.TRANSPORTATION.html)). TxDMV's premises checklist LF628 (Rev 08/25) still shows the barrier. - **2026.** OCCC applications moved to NMLS, and the OCCC license now runs January 1 to December 31, renewed November 1 to December 31 ([OCCC rule adoption](https://occc.texas.gov/wp-content/uploads/2026/04/mvsf-licenseterm-adoption-fc-050726.pdf)). Older materials still give October 31. See [Texas OCCC license renewal](/blog/texas-occc-license-renewal). - **July 1, 2025.** HB 718 replaced paper buyer's tags with metal plates and made webDEALER mandatory. - **January 1, 2025.** Non-commercial vehicles no longer need a safety inspection to register ([TxDMV](https://www.txdmv.gov/motorists/register-your-vehicle)). ## Frequently asked questions ### How many cars can you sell in Texas without a dealer license? Under the main exemption, fewer than five vehicles of the same type in a calendar year, and only vehicles owned and registered in your own name. Past that, you generally need a GDN. Dealing without one is a misdemeanor with a fine of $50 to $5,000. The full rule is in [What is a GDN?](/blog/what-is-a-gdn-texas-dealer-license) ### How long does it take to get a dealer license in Texas? TxDMV reported an average of 84 days to process a new GDN application in fiscal year 2025, against a 30-day target, and says times vary with application volume. The city's approval, the course and the bond come before you apply, so start with the city. ### Can I run a car dealership from my house in Texas? No. TxDMV's premises rule bars a dealer's office in a residence, apartment, hotel, motel or rooming house, and bars virtual or subscription offices. You need an office open to the public with at least 100 square feet of floor space and a 7-foot ceiling, plus a display area for five vehicles. ### Do I need a separate license to finance my own customers? Yes. A dealer that finances its own sales needs a motor vehicle sales finance license from the OCCC, even at zero interest, and the Comptroller's Seller-Financed Sales Tax Permit. Signing finance contracts as the seller and assigning them to a lender also requires the OCCC license. ### Does every employee have to take the pre-licensing course? No. One owner or operating manager listed on the application takes the 6-hour online course, once. If that person leaves, a new owner or operating manager must complete it before the next license renewal. Wholesale dealers are not required to take it. ## Your next step Get the one-page [Texas dealer license checklist](/blog/texas-dealer-license-gdn-step-by-step): every form, fee and office from this guide in the order you will need them, sent to your inbox. When your application is in, you can [set up your lot in LeftLane](https://sandbox.leftlanesoftware.com/signup) or [book a LeftLane demo](https://meetings.hubspot.com/greg954/leftlane-request-demo?uuid=b03d2fbc-01be-4deb-8a2a-bf6c5ff6943d) while you wait. LeftLane is a dealer management system for independent and buy-here-pay-here dealers, and real people answer the phone at 512-222-9549 if you get stuck. ## Sources - [TxDMV: Dealers](https://www.txdmv.gov/dealers), [independent GDN](https://www.txdmv.gov/dealers/licensing/independent-gdn), [dealer education](https://www.txdmv.gov/dealers/dealer-education), [fingerprinting](https://www.txdmv.gov/dealers/fingerprinting), [dealer license plates](https://www.txdmv.gov/dealers/dealer-license-plates) and [HB 718](https://www.txdmv.gov/dealers/HB718) - [TxDMV: eLICENSING user guide](https://www.txdmv.gov/sites/default/files/body-files/eLICENSING-UserGuide_Independent-GDN-Licensees.pdf) and [new GDN user guide](https://www.txdmv.gov/sites/default/files/body-files/eLICENSING_User_Guide_for_New_Independent_GDN_Licenses.pdf) - [TxDMV: Form LG100](https://www.txdmv.gov/sites/default/files/form_files/txdmv_LG100.pdf) and [Form LP801](https://www.txdmv.gov/sites/default/files/form_files/New_Dealer_Startup_Info_LP801.pdf) - [TxDMV: Chapter 215 rule adoption, effective October 29, 2026](https://www.txdmv.gov/sites/default/files/body-files/Chapter_215_Relating_to_Enforceability_of_Motor_Vehicle_Records_Disclosure_Act-_Adopt.pdf) and [Texas Register, October 23, 2026](https://www.sos.state.tx.us/texreg/archive/October232026/Adopted%20Rules/43.TRANSPORTATION.html) - [TxDMV: FY 2025 Chairman's Annual Report](https://www.txdmv.gov/sites/default/files/report-files/FY-2025_Chairmans_Annual_Report.pdf) - [TxDMV: register your vehicle](https://www.txdmv.gov/motorists/register-your-vehicle) and [Bexar County emissions notice](https://www.txdmv.gov/sites/default/files/body-files/2026-09-15_Bexar_County_Emissions.pdf) - 43 TAC [215.133](https://www.law.cornell.edu/regulations/texas/43-Tex-Admin-Code-SS-215-133), [215.137](https://www.law.cornell.edu/regulations/texas/43-Tex-Admin-Code-SS-215-137), [215.140](https://www.law.cornell.edu/regulations/texas/43-Tex-Admin-Code-SS-215.140), [215.144](https://www.law.cornell.edu/regulations/texas/43-Tex-Admin-Code-SS-215.144), [215.155](https://www.law.cornell.edu/regulations/texas/43-Tex-Admin-Code-SS-215.155), [215.161](https://www.law.cornell.edu/regulations/texas/43-Tex-Admin-Code-SS-215-161) and [217.74](https://www.law.cornell.edu/regulations/texas/43-Tex-Admin-Code-SS-217.74) - Texas statutes: [Transportation Code Chapter 503](https://statutes.capitol.texas.gov/Docs/TN/htm/TN.503.htm), [Chapter 728](https://statutes.capitol.texas.gov/Docs/TN/htm/TN.728.htm), [Tax Code Chapter 152](https://statutes.capitol.texas.gov/Docs/TX/htm/TX.152.htm), [Tax Code Chapter 23](https://statutes.capitol.texas.gov/Docs/TX/htm/TX.23.htm) and [Finance Code Chapter 349](https://statutes.capitol.texas.gov/Docs/FI/htm/FI.349.htm) - [Texas Comptroller: Vehicle Inventory Tax](https://comptroller.texas.gov/taxes/publications/96-254/vit.php), [seller-financed sales](https://comptroller.texas.gov/taxes/publications/96-254/seller-financed-sales.php) and [motor vehicle tax forms](https://comptroller.texas.gov/taxes/motor-vehicle/forms/) - [OCCC: motor vehicle sales finance](https://occc.texas.gov/industry/motor-vehicle-sales-finance-mvsf), [licensing](https://occc.texas.gov/industry/motor-vehicle-sales-finance-mvsf/mvsf-licensing-forms), [company license checklist, June 4, 2026](https://occc.texas.gov/wp-content/uploads/2026/06/Motor-Vehicle-Sales-Finance-Company-License.pdf), [Bulletin B23-1](https://occc.texas.gov/wp-content/uploads/2025/11/b23-1-mvsf-licensing-requirements.pdf) and [license term adoption](https://occc.texas.gov/wp-content/uploads/2026/04/mvsf-licenseterm-adoption-fc-050726.pdf) _This guide is general information for dealers, not legal advice. Rules and fees change. Confirm with the agency or a licensed attorney in your state before you act._