What is a GDN? The Texas dealer license in plain English
Last verified: November 9, 2026. Every rule links to its official source.
A GDN, or general distinguishing number, is the Texas dealer license, issued by the Texas Department of Motor Vehicles (TxDMV). You can skip it if you sell or offer to sell fewer than five vehicles of the same type in a calendar year, each owned and registered in your name. A new independent GDN costs $700 for a two-year term and needs a $50,000 bond.
A GDN at a glance
| What | The rule | Source |
|---|---|---|
| Who can skip it | Fewer than five vehicles of the same type sold or offered in a calendar year, owned and registered in your name | Transportation Code 503.024 |
| Cost | $700 per GDN category for two years | TxDMV: eLICENSING guide |
| Renewal | $400 per two-year renewal; file up to 180 days early | Transportation Code 503.007; TxDMV: Dealers |
| Bond | $50,000 | Transportation Code 503.033 |
| Course | At least 6 hours online, at most $150 | 43 TAC 215.161 |
Who needs a GDN in Texas?
Anyone selling vehicles who does not fit an exemption. The main one, Transportation Code 503.024, says a person “is not required to obtain a dealer general distinguishing number if the person: sells or offers to sell during a calendar year fewer than five vehicles of the same type that are owned and registered in that person’s name”.
- Fewer than five: four of one type in a calendar year, at most.
- Offers count, not only completed sales.
- Owned and registered in your name. A car you resell without registering it to yourself falls outside the exemption.
Other exceptions include forced sales by a lienholder and antique vehicles at least 25 years old.
What happens if you sell cars without a GDN?
You face three kinds of penalty, and the car can be towed. Dealers call this curbstoning, which also covers selling away from a licensed location.
- Criminal: a misdemeanor with a fine of $50 to $5,000, and “the court may treble the fine” (Transportation Code 503.094).
- Civil: $50 to $1,000, with each act and each day a separate violation (Transportation Code 503.095).
- Administrative: up to $10,000 for each violation (Occupations Code 2301.801).
- Towing: a peace officer may have the car towed after a notice has been on it for at least two hours (Transportation Code 503.096).
What kinds of GDN are there?
TxDMV’s page for independent dealers lists six GDN types; most used-car lots need Independent Motor Vehicle. The $700 fee applies to each category.
| GDN type | What it covers | $50,000 bond | 6-hour course |
|---|---|---|---|
| Independent Motor Vehicle | Buy, sell or exchange used cars, trucks, motor homes and neighborhood vehicles | Yes | Yes |
| Wholesale | Sell or exchange only with other licensed dealers; no five-vehicle display area | Yes | No |
| Independent Motorcycle | Motorcycles | Yes | No |
| Travel Trailer | Travel trailers | No | No |
| Trailer/Semitrailer | Trailers and semitrailers | No | No |
| Independent Mobility Motor Vehicle | Mobility motor vehicles | Yes | No |
Franchise, salvage dealer and several other licenses are separate. An independent motor vehicle GDN also lets you act as a salvage vehicle dealer or rebuilder (Occupations Code 2302.101).
One GDN can cover several locations in the same city (Transportation Code 503.027); a location outside that city needs its own GDN and bond (43 TAC 215.135).
What does a GDN let you do, and what does it take?
It lets you buy and sell vehicles as a business, buy used inventory without owing tax when you hold it exclusively for resale, and use dealer plates. Financing is separate: the OCCC, the Office of Consumer Credit Commissioner, says a sale may be considered financed when the buyer pays over time, even at no interest, and financed sales need its license (Financing your own sales in Texas).
Getting a GDN takes:
- A place of business that meets 43 TAC 215.140. For a retail lot: an office of at least 100 square feet, a display area for at least five vehicles, a permanent sign and posted hours. No residence or virtual office.
- City approval: a certificate of occupancy or other official proof of local compliance. See the city and county approvals a Texas car lot needs.
- The course, completed by one owner or operating manager.
- The $50,000 bond, at the premium a surety quotes.
- Fingerprints after TxDMV emails you, at $40 plus any service fees.
Each step is in the GDN step-by-step guide, and the whole path is in how to start a used car dealership in Texas.
How much does a GDN cost, and how long does it last?
$700 per category for the first two years, then $400 per two-year renewal.
- Fee and term: by statute, $500 for the first year and $200 for each later year, collected as $700 per category for the two-year term.
- Renewal: $200 a year, so $400 per renewal for each GDN, plus plates.
- Late renewal: TxDMV accepts one up to 90 days after expiration, but you may not do licensed business until it is approved. After 90 days the license closes (43 TAC 215.83).
- Waiting: TxDMV reported an average of 84 days to process a new GDN application in fiscal 2025, against a 30-day target (FY 2025 Chairman’s Report). That is a reported average, not a promise.
Can a licensed dealer lose the GDN for selling too few cars?
Yes. Five is the line on both sides of the license.
- TxDMV may cancel a GDN if the dealer “has been licensed for at least 12 months and has not assigned at least five vehicles during the previous 12-month period” (Transportation Code 503.038).
- If your annual inventory tax declaration reports fewer than five sales in the prior year, the chief appraiser “shall report” you to TxDMV to start cancellation (Tax Code 23.121). See the Texas inventory tax guide.
What trips people up
- Miscounting the five. Offers count, and only cars owned and registered in your name qualify.
- Treating wholesale as cheap retail. Wholesale means dealer to dealer only.
- Letting the renewal lapse. No licensed business until a late renewal is approved, and after 90 days the license closes.
Frequently asked questions
How many cars can I sell in Texas without a dealer license?
Fewer than five vehicles of the same type in a calendar year, each owned and registered in your name. Cars you offer for sale count too. Beyond that you need a GDN from TxDMV, and dealing without one brings criminal, civil and administrative penalties.
Can I get a GDN without a car lot?
Not for retail. A retail dealer needs a display area for at least five vehicles, an office of at least 100 square feet, a sign and posted hours. A wholesale GDN needs no display area, but you may deal only with licensed dealers, and the office still cannot be in a residence.
Do I need to take the dealer course again when I renew?
Generally no. One owner or operating manager takes the course once, and the statute does not require it again for the next renewal. If that person leaves the business, a new owner or operating manager must complete the course before the next renewal.
Will I need to be fingerprinted to renew?
Possibly, which is TxDMV’s own answer. Prints are taken once while you keep an active license; existing holders give them at renewal or at an ownership change amendment, whichever comes first. A late renewal or a closed license means new prints for a later license.
Is the GDN the only license I need?
Not always. Financing sales, even at zero interest, or signing finance contracts as the seller and assigning them needs an OCCC license. Houston issues its own Motor Vehicle Dealer license, which requires the GDN first. For Dallas, San Antonio and Fort Worth we found no separate city dealer license; confirm with your city.
Your next step
Get the free one-page Texas dealer license checklist: every form, fee and office in order, sent by email.
When your application is in, you can set up your lot in LeftLane or book a LeftLane demo while you wait. LeftLane is a dealer management system for independent and buy-here-pay-here dealers, with real people on the phone at 512-222-9549.
Sources
- Texas Transportation Code Chapter 503: dealer licensing
- Texas Occupations Code Chapter 2301: penalties and Chapter 2302: salvage
- Texas Tax Code Chapter 23
- TxDMV: Independent GDN, Dealer licensing, Dealers, eLICENSING guide, Dealer education, Fingerprinting, Dealer license plates
- TxDMV: Chapter 215 adoption, October 29, 2026
- TxDMV: FY 2025 Chairman’s Annual Report
- 43 TAC 215.133, 215.135, 215.140, 215.161
- Texas Comptroller: tax guide for dealers
- OCCC: Motor vehicle sales finance
- City of Houston: Motor Vehicle Dealer license
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.