# What is a GDN? The Texas dealer license in plain English > A GDN is the Texas dealer license from TxDMV. You generally need one unless you sell under five same-type vehicles a year owned and registered to you. - Canonical URL: https://www.leftlanesoftware.com/blog/what-is-a-gdn-texas-dealer-license - Language: en-US - Spanish version (Español): https://www.leftlanesoftware.com/blog/que-es-un-gdn-licencia-de-dealer-en-texas - State: Texas - Topic: Dealer licensing - Last verified: 2026-11-09 _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](https://statutes.capitol.texas.gov/Docs/TN/htm/TN.503.htm), each owned and registered in your name. A new independent GDN costs [$700 for a two-year term](https://www.txdmv.gov/sites/default/files/body-files/eLICENSING-UserGuide_Independent-GDN-Licensees.pdf) and needs a [$50,000 bond](https://statutes.capitol.texas.gov/Docs/TN/htm/TN.503.htm). ## 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](https://statutes.capitol.texas.gov/Docs/TN/htm/TN.503.htm) | | Cost | $700 per GDN category for two years | [TxDMV: eLICENSING guide](https://www.txdmv.gov/sites/default/files/body-files/eLICENSING-UserGuide_Independent-GDN-Licensees.pdf) | | Renewal | $400 per two-year renewal; file up to 180 days early | [Transportation Code 503.007](https://statutes.capitol.texas.gov/Docs/TN/htm/TN.503.htm); [TxDMV: Dealers](https://www.txdmv.gov/dealers) | | Bond | $50,000 | [Transportation Code 503.033](https://statutes.capitol.texas.gov/Docs/TN/htm/TN.503.htm) | | Course | At least 6 hours online, at most $150 | [43 TAC 215.161](https://www.law.cornell.edu/regulations/texas/43-Tex-Admin-Code-SS-215-161) | ## Who needs a GDN in Texas? Anyone selling vehicles who does not fit an exemption. The main one, [Transportation Code 503.024](https://statutes.capitol.texas.gov/Docs/TN/htm/TN.503.htm), 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](https://statutes.capitol.texas.gov/Docs/TN/htm/TN.503.htm)). - **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](https://statutes.capitol.texas.gov/Docs/OC/htm/OC.2301.htm)). - **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](https://www.txdmv.gov/dealers/licensing/independent-gdn) 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](https://www.txdmv.gov/sites/default/files/body-files/eLICENSING-UserGuide_Independent-GDN-Licensees.pdf) | [6-hour course](https://www.txdmv.gov/dealers/dealer-education) | | ---------------------------------- | ------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------- | | 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](https://www.txdmv.gov/dealers/licensing). An independent motor vehicle GDN also lets you act as a salvage vehicle dealer or rebuilder ([Occupations Code 2302.101](https://statutes.capitol.texas.gov/Docs/OC/htm/OC.2302.htm)). 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](https://www.law.cornell.edu/regulations/texas/43-Tex-Admin-Code-SS-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](https://comptroller.texas.gov/taxes/publications/96-254/dealers.php) when you hold it exclusively for resale, and use [dealer plates](https://www.txdmv.gov/dealers/dealer-license-plates). Financing is separate: the [OCCC](https://occc.texas.gov/industry/motor-vehicle-sales-finance-mvsf), 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](/blog/texas-in-house-financing-occc-license)). Getting a GDN takes: - **A place of business** that meets [43 TAC 215.140](https://www.law.cornell.edu/regulations/texas/43-Tex-Admin-Code-SS-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](https://www.law.cornell.edu/regulations/texas/43-Tex-Admin-Code-SS-215-133) of local compliance. See [the city and county approvals a Texas car lot needs](/blog/texas-car-lot-city-county-approvals). - **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](https://www.txdmv.gov/dealers/fingerprinting). Each step is in the [GDN step-by-step guide](/blog/texas-dealer-license-gdn-step-by-step), and the whole path is in [how to start a used car dealership in Texas](/blog/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](https://www.txdmv.gov/sites/default/files/body-files/Chapter_215_Relating_to_Enforceability_of_Motor_Vehicle_Records_Disclosure_Act-_Adopt.pdf)). - **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](https://www.txdmv.gov/sites/default/files/report-files/FY-2025_Chairmans_Annual_Report.pdf)). 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](https://statutes.capitol.texas.gov/Docs/TN/htm/TN.503.htm)). - 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](https://statutes.capitol.texas.gov/Docs/TX/htm/TX.23.htm)). See the [Texas inventory tax guide](/blog/texas-vehicle-inventory-tax-vit-sit). ## 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](https://www.houstonpermittingcenter.org/hpdadd1007), 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](/blog/texas-dealer-license-gdn-step-by-step): every form, fee and office in order, sent by email. 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, with real people on the phone at 512-222-9549. ## Sources - [Texas Transportation Code Chapter 503: dealer licensing](https://statutes.capitol.texas.gov/Docs/TN/htm/TN.503.htm) - [Texas Occupations Code Chapter 2301: penalties](https://statutes.capitol.texas.gov/Docs/OC/htm/OC.2301.htm) and [Chapter 2302: salvage](https://statutes.capitol.texas.gov/Docs/OC/htm/OC.2302.htm) - [Texas Tax Code Chapter 23](https://statutes.capitol.texas.gov/Docs/TX/htm/TX.23.htm) - TxDMV: [Independent GDN](https://www.txdmv.gov/dealers/licensing/independent-gdn), [Dealer licensing](https://www.txdmv.gov/dealers/licensing), [Dealers](https://www.txdmv.gov/dealers), [eLICENSING guide](https://www.txdmv.gov/sites/default/files/body-files/eLICENSING-UserGuide_Independent-GDN-Licensees.pdf), [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) - [TxDMV: Chapter 215 adoption, 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) - [TxDMV: FY 2025 Chairman's Annual Report](https://www.txdmv.gov/sites/default/files/report-files/FY-2025_Chairmans_Annual_Report.pdf) - [43 TAC 215.133](https://www.law.cornell.edu/regulations/texas/43-Tex-Admin-Code-SS-215-133), [215.135](https://www.law.cornell.edu/regulations/texas/43-Tex-Admin-Code-SS-215-135), [215.140](https://www.law.cornell.edu/regulations/texas/43-Tex-Admin-Code-SS-215.140), [215.161](https://www.law.cornell.edu/regulations/texas/43-Tex-Admin-Code-SS-215-161) - [Texas Comptroller: tax guide for dealers](https://comptroller.texas.gov/taxes/publications/96-254/dealers.php) - [OCCC: Motor vehicle sales finance](https://occc.texas.gov/industry/motor-vehicle-sales-finance-mvsf) - [City of Houston: Motor Vehicle Dealer license](https://www.houstonpermittingcenter.org/hpdadd1007) _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._