Texas Dealer Bond Overview
- Purpose: To ensure dealers pay all valid bank drafts for purchased vehicles and transfer titles for each sold vehicle
- Who Needs It: Any person who buys, sells or exchanges motor vehicles in Texas
- Regulating Body: The Texas Department of Motor Vehicles
- Bond Amount: $50,000 for each county in which the dealer operates
- Minimum Price: $375 for a two-year term
What Is a Texas Motor Vehicle Dealer Bond?
This Texas surety bond ensures that auto dealers will pay all valid bank drafts for vehicles they purchase and transfer titles for each motor vehicle they sell. It is required as part of the licensing process to prove financial security and protect customers.
Who Needs a Motor Vehicle Dealer Bond?
Texas law requires any person who buys, sells, or exchanges motor vehicles to file a $50,000 motor vehicle dealer bond.
These bonds must be filed at the county level, and dealerships must have a separate bond and license for each county in which they work.
Note: Dealers who sell new vehicles need a separate franchise dealer license. If you need a bond for vehicle registration, a separate Texas certificate of title bond is required.
How Much Do Auto Dealer Bonds Cost in Texas?
$50,000 Texas motor vehicle dealer bond costs start at $375 for the two-year term. We’ll provide your exact rate after a quick application review. Most qualified applicants can expect to pay a rate of 0.5–2%. Apply in minutes now.
SuretyBonds.com offers the lowest available rates from our nationwide provider network with no added fees.
How Does the Surety Bond Work?
An auto dealer bond creates a financial contract between three parties.
- Principal: The motor vehicle dealer filing the bond
- Obligee: The Texas Department of Motor Vehicles
- Surety: The issuing surety provider
By filing a Texas MVD bond, you agree to follow Texas Transportation Code when operating your dealership. If a judgment is made against the dealership, a claim can be filed on the bond.
The surety company will pay valid claims up to the full $50,000 bond amount, which you must then reimburse.
How Do I Get My Bond?
You can apply for your Texas auto dealer bond online 24/7. Just click Get Started on this page. You'll need to provide your dealership name and your existing dealer license number (if applicable).
We’ll provide your quote within one business day or less. You can checkout online at your convenience and we’ll send your official bond form via email.
How Fast Can I Get My Bond?
With our industry-leading technology and responsive team, SuretyBonds.com delivers Texas dealer bonds faster than any provider. Orders placed by 4 PM CST Monday-Friday are typically processed same-day.
Can I Get Bonded With Bad Credit?
Bad credit may impact your premium rate, but it doesn’t always disqualify car dealers from getting a bond. Apply to see if you qualify.
How Do I Renew My Bond?
You’ll need to renew your dealer bond every two years. We’ll provide helpful reminders before your bond expires. All you need to do is pay the renewal invoices and your bond will stay active for another year.
How Do I Update My Bond?
If the state requires your surety bond to be updated for any reason, contact your surety provider. The most common changes for these bonds include the car dealership's name or address.
If you bought your bond from us, email [email protected] outlining the change request.
How to Get a Vehicle Dealer License in Texas
You'll apply for your dealership license through the state's online eLICENSING application. You must submit a criminal history review and fingerprinting approval. If your application is approved, the Motor Vehicle Division will issue you a general distinguishing number (GDN).
Learn more about How to get a Texas Auto Dealer License in our step-by-step guide.
