Texas Dealer Licensing Guide
Getting Your Texas Dealer License (GDN)
An orientation to the process, what to expect, in what order, and who to ask.
Before You Begin
This guide is a general orientation only. Always confirm current requirements directly with the Texas Department of Motor Vehicles before spending money or submitting anything.
Texas changed how dealers issue plates.
House Bill 718 took effect July 1, 2025. Dealer-issued paper temporary tags were eliminated and replaced with metal license plates issued at the point of sale, and supported retail transactions must go through webDEALER.
Any dealer guide describing routine printing of paper buyer's tags predates this change. Work from the current TxDMV Dealer Manual and HB 718 guidance.
The authority on this process
Texas Department of Motor Vehicles (TxDMV)
Motor Vehicle Division
Applications, renewals, and amendments are filed online through eLICENSING.
The definitive reference
Use the current TxDMV Motor Vehicle Dealer Manual and the current eLICENSING User Guide for Independent GDN licensees.
Welcome and Congratulations
Texas issues dealers a General Distinguishing Number, or GDN, and the license runs on a two-year cycle. The licensing process is filed online.
Wayne Reaves has worked alongside independent dealers for years. We are not a licensing service and do not file on your behalf, but this guide lays out the shape of the process so you know what is coming.
Do not commence business until the license is effective.
TxDMV also requires timely notice of opening, closing, or relocating dealership locations. Treat those notification rules as seriously as the application itself.
The Shape of the Process
Texas divides the work into pre-application preparation, online submission, and day-one operating requirements.
- 01Choose Your GDN ClassificationSelect the GDN classification that matches what you intend to sell and to whom.
- 02Pre-Licensing EducationComplete the required dealer education and keep proof of completion.
- 03Business Registration & EINRegister the entity and assumed name and obtain a federal EIN.
- 04Business LocationSecure a compliant location, lease or ownership proof, and mounted signage.
- 05Surety BondObtain the bond for the full required license term if your GDN classification requires it.
- 06Insurance & Identity VerificationAddress current liability coverage and owner or manager identity requirements.
- 07Apply Through eLICENSINGUpload the supporting documents and pay the licensing and plate fees online.
- 08Plates & webDEALERSet up webDEALER, order and secure metal plates, and follow current title and plate procedures.
Why we do not list dollar amounts here: Bond, license, plate, and course fees are set by statute and rule and can change. Use the current Dealer Manual and eLICENSING and confirm bond requirements with a licensed surety agent.
Choosing Your GDN Classification
Texas issues GDNs in multiple classifications, including independent used motor vehicle, wholesale, wholesale auction, motorcycle, trailer and semitrailer, and others. The classification determines what you may sell and to whom.
Bonding does not apply identically to every classification, and franchised dealers are handled separately.
Texas may allow one GDN to cover multiple business locations in the same city when the current requirements are met. Each location must satisfy the premises rules independently.
Pre-Licensing Education
New applicants must complete the required dealer education course and provide proof of completion with the application.
Confirm current course length, approved providers, and any exemptions directly with TxDMV before registering.
Business Registration & EIN
Register the business entity with the Texas Secretary of State and, if applicable, file the assumed name used by the dealership. TxDMV requires the Secretary of State certificate of filing with the application.
Obtain a federal EIN free directly from the IRS.
Which structure is right for you is a question for an attorney or CPA. It affects taxes, liability, and how the business name appears on the bond and application.
The single most common delay: name mismatches and bond errors.
The bond, Secretary of State filing, and eLICENSING application must match exactly.
Your Business Location
Texas sets premises requirements for the office, display space, signage, and accessibility. A copy of the lease or proof of property ownership is part of the application.
You also upload a photograph showing the business structure and mounted business sign.
Local zoning is a separate city or county requirement.
Confirm current premises, sign, display-area, and operating-hour rules before signing a lease. Discovering that a property cannot be licensed after signing is one of the most expensive mistakes in the process.
Surety Bond
Most GDN applicants must have an executed motor vehicle surety bond on file before a license is issued.
Texas requires the bond to cover the full two-year license period and specifies how the term must be written.
If a bond cancels mid-cycle without a replacement on file, the license can be placed into administrative suspension. Renewal also requires a bond covering the new term.
Confirm the current amount, correct bond form, applicable GDN classifications, and exact term requirements with TxDMV or a licensed surety agent before purchasing.
Choosing a provider
Wayne Reaves does not sell bonds or insurance, does not recommend a particular provider, and receives nothing if you choose one company over another. Compare quotes from licensed providers.
Insurance & Identity Verification
Dealers are expected to maintain appropriate liability coverage. Confirm current coverage requirements and minimums with TxDMV and tell your agent the policy is for a Texas dealer license.
Proof of identity is required for owners and managers. Texas uses fingerprinting through an approved vendor as part of the process.
Confirm the current fingerprint vendor, process, and exactly who must be fingerprinted before scheduling.
Applying Through eLICENSING
License applications, renewals, amendments, and license closures are filed online through eLICENSING.
After submission, the application is assigned a work item number and reviewed by TxDMV licensing specialists.
Once approved, you receive the GDN. Dealer plates are ordered through the eLICENSING account.
Plates, webDEALER & Day-One Operations
Metal plates at the point of sale
Since House Bill 718 took effect, the former dealer-issued paper temporary tag system has been replaced for ordinary dealer transactions by metal plates issued at the point of sale. Limited paper permits remain for specific circumstances.
webDEALER
Retail motor vehicle transactions supported by webDEALER must be submitted through it. Access is arranged through the county tax assessor-collector's office, so set it up before the first sale.
Plates are controlled inventory
Metal plates must be securely stored and handled according to TxDMV's current rules. Plates that are damaged, no longer needed, or associated with a closed license must be handled within the required state timeframes.
Confirm current plate, permit, and webDEALER procedures directly with TxDMV and your county tax office. These are daily operating requirements, not just application paperwork.
Renewal
Texas GDN licenses run on a two-year cycle. Renewal requires a timely eLICENSING filing and a bond covering the new term where bonding applies.
Note the expiration date when the license is issued and start the renewal process well before it.
Federal Obligations Start on Day One
State licensing is not the whole picture. Federal rules apply when you begin selling, including the FTC's Used Car Rule requiring a Buyers Guide on used vehicles offered for sale. Other federal rules apply to advertising, financing, and recordkeeping.
Ask your attorney or state association what applies to your operation.
How Wayne Reaves Fits In
We want to be straightforward about what we do and do not do.
What we do not do
- File applications
- Form business entities
- Sell bonds or insurance
- Provide legal or tax advice
- Interpret state requirements on your behalf
Those questions belong with TxDMV, your county tax office, your attorney, your CPA, and licensed agents.
We also do not receive compensation or referral fees from bond or insurance providers.
What we do
We build dealer management software and dealer websites for independent dealers.
- Inventory
- Deal tracking
- Customer records
- Reporting
- Compliance tools
- Dealer websites that put inventory in front of buyers
Where to Get Answers
Disclaimer
This guide is provided for general informational purposes only and is intended as a high-level overview of the dealer licensing process. It is not intended to be comprehensive and should not be relied upon as legal, tax, financial, insurance, regulatory, or licensing advice. Laws, regulations, agency procedures, forms, fees, bond and insurance requirements, deadlines, and other licensing requirements may change at any time and may vary based on license type, business structure, location, or individual circumstances.
Wayne Reaves Computer Systems Inc. does not represent or warrant that the information contained in this guide is complete, current, or applicable to every situation. Before making financial commitments, signing a lease, purchasing insurance or a bond, submitting an application, or otherwise acting in reliance on this information, verify all current requirements directly with the appropriate state and local licensing authorities and consult qualified legal, tax, insurance, or other professional advisors as appropriate.
Use of this guide does not create an attorney-client, advisory, fiduciary, or other professional relationship with Wayne Reaves Computer Systems Inc.