How to get a Texas dealer license (GDN), step by step

Last verified: November 9, 2026. Every rule links to its official source.

To sell used cars to the public in Texas you need a dealer license called an independent motor vehicle general distinguishing number (GDN), issued by the Texas Department of Motor Vehicles (TxDMV). Plan on a location that meets TxDMV’s premises rule, a 6-hour course, a $50,000 dealer bond and a $700 application. TxDMV reported an 84-day average to process a new application in fiscal 2025.

The Texas dealer license at a glance

What	The rule	Source
License	Independent motor vehicle GDN, filed in eLICENSING	TxDMV: independent GDN
Exemption	Fewer than five vehicles of one type in a calendar year, all owned and registered in your name	Transportation Code 503.024
Application fee	$700 per GDN category, for two years	TxDMV eLICENSING user guide
Dealer bond	$50,000, two-year term	Transportation Code 503.033
Course	At least 6 hours online, $150 cap	43 TAC 215.161
Premises	100-square-foot office, 7-foot ceiling, display room for five vehicles, 6-inch sign letters	43 TAC 215.140
Fingerprints	After TxDMV emails you; $40 plus service fees	TxDMV: fingerprinting
Processing time	84-day average in fiscal 2025; 30-day target	TxDMV FY 2025 Chairman’s Report
Renewal	$400 every two years	Transportation Code 503.007

Do you need a GDN in Texas?

Yes, if you sell cars as a business. Transportation Code 503.024 exempts a person who sells or offers to sell fewer than five vehicles of the same type in a calendar year, all owned and registered in that person’s name.

Unlicensed dealing can bring a criminal fine of $50 to $5,000 that a court may treble (503.094) and a civil penalty of $50 to $1,000 for each act or day (503.095). TxDMV can add up to $10,000 per violation (Occupations Code 2301.801). More in What is a GDN?

Which GDN do you need?

Most used-car lots need the independent motor vehicle GDN. TxDMV lists six types, and each one you select costs $700.

GDN	What it lets you do	Course
Independent motor vehicle	Buy, sell or exchange any type of used cars, trucks, motor homes and neighborhood vehicles	Required
Wholesale motor vehicle	Sell or exchange vehicles only with other licensed dealers; no five-vehicle display area	Not required
Independent motorcycle, independent mobility motor vehicle, travel trailer, trailer or semitrailer	The vehicle type in the name	Not required

Travel trailer and trailer or semitrailer GDNs need no bond. A wholesale office must be open at least two weekdays a week for two consecutive hours (TxDMV Form LF628). Franchise and the other TxDMV license types are separate. An independent motor vehicle GDN also covers acting as a salvage vehicle dealer or rebuilder (Occupations Code 2302.101).

First, decide how you will sell

Your payment model decides whether the GDN is enough. Cash sales need only the GDN. If a buyer signs a retail installment contract with you as the seller, even one you assign to a lender at once, the OCCC, the Office of Consumer Credit Commissioner, says you need its license. Financing your own customers adds that license and a Comptroller permit. The Texas startup hub compares the models.

Step 1: Form the business and register the name

TxDMV issues the GDN in your legal business name. The bond must use that exact name, and the sign and business phone must show it or your assumed name. You should settle the name and entity type, with an accountant or attorney, before you sign a lease or buy a bond.

43 TAC 215.133 asks for your Secretary of State certificate of filing, incorporation or registration if you form an entity, and each assumed name certificate. Sole proprietors and general partnerships file the assumed name with the county clerk; other entities file it with the Secretary of State (TxDMV application guide). The assumed name must be active and unexpired.

Step 2: Find a location that meets the premises rule

The site must meet 43 TAC 215.140 on the day you apply, and you should confirm zoning with the city before you sign the lease.

• Building. A permanent roof and connecting exterior walls on all sides; a portable building only if it is not a readily moveable trailer or vehicle. The address must be in Texas and recognized by the Postal Service.
• Office. At least 100 square feet of interior floor space, not counting hallways, closets or restrooms, with a ceiling of at least 7 feet and room to sit with a customer in private.
• Not allowed. A residence, apartment, hotel, motel, rooming house or any space not open to the public. A restaurant, gas station or convenience store without its own entrance door. A virtual or subscription office.
• Display area. Room for at least five vehicles of your license type, reserved for inventory, not customer or employee parking or storage. At or next to the business address, lit if you open at night; it may be indoors. Not on a public easement, right-of-way or driveway without the governing body’s written consent.
• Storage lot. Allowed only if fenced or access-controlled, closed to the public and free of sales activity.
• Sharing. No more than four retail dealers per building, and retail and wholesale dealers generally may not share one. Sharing with another business takes your own lease, phone, sign, office equipment and an office with permanent interior walls. A shared display or parking area needs permanent signage marking your reserved space. Older materials, including TxDMV’s August 2025 premises checklist, describe a heavy barrier; the amended rule replaced it on October 29, 2026.
• Lease. A two-year term, or one year with an option to renew for another year (Form LG100), continuous for the license period. A sublease also needs the owner’s signed, notarized statement.

Step 3: Get the city’s approval in writing

TxDMV wants official local proof that a vehicle business may operate there. The rule asks for “a certificate of occupancy, certificate of compliance, or other official documentation” showing the site complies with municipal ordinances, including zoning (43 TAC 215.133). Form LG100 adds that it must be in the name of the dealer or the business and authorize vehicle sales. A remodel or a change of use requires a new one.

Houston also issues a city Motor Vehicle Dealer license that requires the state GDN, so it comes after TxDMV approves you. Details by city: the city and county approvals a Texas car lot needs.

Step 4: Set up the office, the sign, the phone and the hours

Set it up before you apply: you photograph it and sign a notarized affidavit that it meets the rule.

• Equipment. A desk, two chairs, internet access and a working phone number listed in the business or assumed name. Add a locked room or closet, or a locked safe or steel cabinet bolted to the floor or wall, big enough for all your license plates.
• Sign. Your business or assumed name in legible letters at least 6 inches high, on durable, weather-resistant material, easily visible within 100 feet of the main entrance. Bolt it to an exterior wall, bolt or weld it to a sign pole, or, since October 29, 2026, affix or etch it on an exterior window, wall or door. A banner works only as a temporary sign while the permanent one is on order. City sign rules also apply.
• Phone. Answered 8 a.m. to 5 p.m. on weekdays by you, an employee, an answering service, voicemail or an answering machine.
• Hours. At least four days a week, four consecutive hours a day, never by appointment only, posted for each day at the main entrance. You or an employee must be there during posted hours. If nobody can be, post a “be back” sign with the date and time you will return. Under the Blue Law you may not sell or offer vehicles on both Saturday and Sunday.

Step 5: Take the 6-hour pre-licensing course

One owner or operating manager named on the application completes at least 6 hours of online instruction, once (Transportation Code 503.0296; 43 TAC 215.161). The price may not exceed $150 per person, and a trade association may not charge nonmembers a different price.

TxDMV lists the approved providers, and the course is offered in Spanish. TxDMV’s own free dealer training does not count. Only independent motor vehicle applicants need it. If the person who took the course leaves, a new owner or manager must complete it before the next renewal.

Step 6: Buy the $50,000 dealer bond

The dealer bond is a $50,000 surety bond, a guarantee you buy from a bonding company that covers valid bank drafts for vehicles you buy and transfer of good title (Transportation Code 503.033). You pay a premium the surety quotes, so you should compare quotes.

• Term. “The bond must begin on the first day of the month and expire on the last day of the month, two years later” (eLICENSING user guide).
• Name and address. The legal business name the GDN will be issued in, and the full physical address of each location (43 TAC 215.137).
• Signatures. Form LG100 lists missing signatures from the applicant or the bond company, a wrong name or address, and the wrong term as common deficiencies.
• Power of attorney. A bond signed by an agent needs an original power of attorney.

Step 7: Take the photos and gather the documents

Form LG100, revised August 2026, is the current checklist. You upload:

• Six photos: business sign, business structure, display space, interior office, plate storage and posted business hours. Older materials list four, without display space and plate storage.
• A notarized affidavit that the premises meet the rule and will be kept that way (43 TAC 215.133).
• The deed or lease, and a current, unexpired ID for each person on the application.
• A Certification of Responsibility signed by a person on the application within 30 days of submission.
• The entity and assumed name certificates, the course certificate, the bond with its power of attorney, and the city’s certificate.

Step 8: Apply in eLICENSING and pay the fees

File in eLICENSING and pay $700 per GDN category: by statute $500 for the first year and $200 for the second (Transportation Code 503.007). You order dealer plates and name your ePLATE administrators in the same application.

• Standard metal dealer plates. $90 each, two for a new independent dealer, for the license term.
• Dealer temporary plates. $10 each, up to 25 in the first term, for transit, loaners and test drives, never to deliver a sold vehicle.
• Payment. From the applicant’s own account, or its attorney’s or CPA’s, or TxDMV withdraws the application and refunds the fee. Unpaid civil penalties under a final TxDMV order must be paid too.

Step 9: Get fingerprinted when TxDMV tells you to

After you submit, TxDMV emails you who must be fingerprinted. Do not book until then (TxDMV fingerprinting; 43 TAC Chapter 211).

• Who. Owners, presidents and managing partners, plus officers, directors, members, managers and others acting for the business, for every GDN type.
• Where. IdentoGO by IDEMIA, live scan or mailed ink cards. Results go straight to TxDMV.
• Cost. $40.00 plus any additional service fees, as of October 1, 2026.
• Reuse. Prints taken for another agency do not count. You are printed once while your license stays active; a late renewal or a closed license means new prints.

Step 10: Pass TxDMV’s review and any site visit

TxDMV may require a site visit to check the premises, so keep the lot as your photos show it. If anything is missing you get a deficiency notice, and the information must reach TxDMV within 20 calendar days or the application is treated as withdrawn (43 TAC 215.83).

TxDMV reported an 84-day average to process a new GDN application in fiscal 2025, against a 30-day target. That is a past average, not a promise. You can check your status online or call TxDMV at 1 (888) 368-4689.

Do not sell until the GDN is issued. You can set up your lot in LeftLane while you wait.

Step 11: Once licensed: webDEALER, plates, county accounts and inventory tax

TxDMV’s new dealer startup sheet, Form LP801, puts the county steps within 30 days of your license’s active date.

• webDEALER. Every dealer must file title applications through webDEALER (Transportation Code 520.0055). Older materials call it optional; it has been mandatory since July 1, 2025. Ask each county tax assessor-collector you file with for access. Every user must finish TxDMV’s webDEALER training first (43 TAC 217.74).
• Plates. Older materials describe paper buyer’s tags. Since July 1, 2025 you issue a metal plate at the sale through ePLATE (formerly eTAG), order buyer’s plates in TxDMV’s Inventory Management System (TxDMV: HB 718), and answer for any missing or misused plate. See After the sale in Texas.
• Inventory tax. The Vehicle Inventory Tax (VIT), which most county tax offices and the pre-licensing course call special inventory tax (SIT), has two filings. Your first declaration (Form 50-244) goes to the appraisal district within 30 days after you start business, presumed to be your GDN date (Tax Code 23.121). Later ones are due by February 1; file by January 31 to be safe. The monthly statement (Form 50-246) goes to the tax assessor-collector by the 10th, even with no sales; if you were not in business on January 1, you pay nothing with it that year. See Texas Vehicle Inventory Tax.
• The wall. Display the GDN for the public, with the bond notice beside it (43 TAC 215.140).

How do you renew a Texas GDN and keep it?

A GDN runs two years, and renewal costs $400 per GDN ($200 a year), plus plates.

• On time. TxDMV accepts renewals up to 180 days before expiration. If you file before the license expires, you may keep operating until TxDMV decides.
• Late. TxDMV accepts a late renewal up to 90 days after expiration, but you may not do licensed business until it is approved. After 90 days TxDMV closes the license (43 TAC 215.83).
• Five sales a year. 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). The appraisal district must report to TxDMV a dealer whose inventory tax declaration shows fewer than five sales (Tax Code 23.121).

If you will finance or assign contracts

Before your first financed sale, including a contract you sign as seller and assign, you need an OCCC Motor Vehicle Sales Finance license, applied for through NMLS; if you carry the notes, add the Comptroller’s Seller-Financed Sales Tax Permit (Form AP-169). The OCCC says a sale may be considered financed when the buyer pays over time, even at zero interest. See Financing your own sales in Texas.

What does a Texas dealer license cost?

Only some of these costs are set by the state.

Item	Cost	Who sets it
GDN application, per category	$700 for two years	State law
Standard metal dealer plate	$90 each; two for a new independent dealer	TxDMV
Dealer temporary plate	$10 each; up to 25 in the first term	TxDMV
Pre-licensing course	Up to $150	The provider, under the state cap
Fingerprints	$40 plus service fees, per person	The vendor
Bond premium	Quoted by the surety	The surety
Certificate of occupancy, sign permit	Varies	Your city
Insurance	Not among the application documents; landlords and lenders set their own	Private parties
Renewal	$400 every two years, plus plates	State law

What trips people up

• Signing the lease before the city answers. Without local proof that vehicle sales are allowed, TxDMV has no certificate to accept.
• A bond that does not match. Wrong names, addresses, terms and missing signatures are common deficiencies.
• Fingerprints taken too early. Wait for TxDMV’s email.
• Paying from someone else’s account. TxDMV withdraws the application.
• Missing the 20-day deficiency deadline. The application is treated as withdrawn.
• Opening without webDEALER training. No training means no access, and no way to file a buyer’s title.

What changed recently

• October 29, 2026. Amended TxDMV rules allowed signs etched or affixed on a window, wall or door, replaced the shared display barrier with signage, and allowed approved off-site plate storage.
• July 1, 2025. Paper tags ended under HB 718, eTAG became ePLATE, and webDEALER became mandatory.

Frequently asked questions

How much does it cost to get a dealer license in Texas?

TxDMV charges $700 per GDN category for two years, $90 per standard dealer plate (two for a new independent dealer) and $10 per dealer temporary plate. The course costs up to $150, and fingerprints $40 plus service fees per person. The bond premium, lease and city permits are quoted separately.

How long does it take to get my license?

TxDMV reported that a new GDN application took 84 days on average to process in fiscal 2025, against its own 30-day target. That is a past average, not a promise. A deficiency notice adds time, and the missing information must arrive within 20 calendar days or the application is treated as withdrawn.

Is every employee of the dealership required to take the course?

No. One owner or operating manager named on the application takes the 6-hour course, once. TxDMV’s list of license types has no state salesperson license. Houston, at the city level, issues its own salesman license to people who sell at a dealership there.

Will I need to be fingerprinted to renew my license?

Possibly. New applicants are printed after TxDMV emails them. An existing license holder is printed at renewal or when filing an ownership change amendment, whichever comes first. It happens once while you keep an active license, but a late renewal or a closed license means new prints for a later license.

Can I run a Texas dealership from home?

No. The premises rule bars an office in a residence, apartment, hotel, motel, rooming house or any building not open to the public, and it bars virtual and subscription offices. You need an office of at least 100 square feet with a 7-foot ceiling, plus room to display five vehicles.

Your next step

Get the one-page Texas dealer license checklist: 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 or book a LeftLane demo while TxDMV reviews it. 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
• TxDMV: independent GDN
• TxDMV: licensing
• TxDMV: eLICENSING user guide
• TxDMV: new application guide
• TxDMV: Form LG100
• TxDMV: Form LF628
• TxDMV: Form LP801
• TxDMV: dealer education
• TxDMV: fingerprinting
• TxDMV: dealer license plates
• TxDMV: HB 718
• TxDMV: webDEALER
• TxDMV: FY 2025 Chairman’s Report
• TxDMV: Chapter 215 adoption, October 2026
• Texas Register: October 23, 2026
• Transportation Code 503
• Transportation Code 520
• Transportation Code 728
• Occupations Code 2301
• Occupations Code 2302
• Tax Code 23
• 43 TAC 215.133
• 43 TAC 215.137
• 43 TAC 215.140
• 43 TAC 215.161
• 43 TAC 217.74
• City of Houston: dealer license
• City of Houston: salesman license
• OCCC: Motor Vehicle Sales Finance
• OCCC: Bulletin B23-1
• Texas Comptroller: seller-financed sales

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.