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Texas Motor Vehicle Dealer Bond

How much does a Texas motor vehicle dealer bond cost?

The Texas Department of Motor Vehicles requires motor vehicle dealers to post a $25,000 surety bond before receiving their license to conduct business within the state.

These 2-year auto dealer bonds are subject to underwriting consideration, so the price you’ll pay for your bond depends on a review of your personal credit report. Qualified applicants could pay as little as $250 for their bonds. Don’t let less-than-stellar credit stop you from purchasing the surety bond you need. SuretyBonds.com offers an exclusive bad credit bonding program through which we approve 99% of all applicants. Find out exactly how much you’ll pay by requesting your free bond quote now!

Bond Type Bond Amount Cost by Credit Score*
680 and up 679 - 600 599 or lower
Texas Motor Vehicle Dealer Bond 2-year term $25,000 Starts at $250 $250-750 $750+ Apply Now
*The bond premium rate quotes provided to you through this website are for pricing comparisons and quotation estimate purposes only. The bond rate quotes provided are based on general assumptions that may or may not be applicable to you and are subject to change at any time. These rate quotes do not constitute an offer of insurance, nor is any contract, agreement, or bond coverage implied, formed or bound by the provision of rate quotes. Bondability, final bond premium rate quotes and an offer of insurance, if any, will be determined by the insurance company providing your bond. You must contact us directly to obtain a quote for binding purposes.

Call SuretyBonds.com at 1 (800) 308-4358 or click here to connect with an expert surety specialist who will walk you through each step of our fast and easy bonding process. We can typically provide your free bond quote within 1 business day of submitting your application!

What is a Texas Motor Vehicle Dealer Bond and why do I need one?

By posting a Texas Auto Dealer Bond, the principal (auto dealer) pledges to comply with all rules and regulations of the Texas Transportation Code, including the payment of all valid bank drafts and checks drawn by him or her for the purchase of motor vehicles, as well as transferring valid titles to each motor vehicle that he or she plans to sell.

If the principal engages unethical or unlawful business practices, the bond is in place to protect any person who suffers financial loss up to the full penal sum of the bond ($25,000). Once the surety pays to settle the claim, it is the responsibility of the principal to reimburse the surety for the money paid out.

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Terms of the Texas Motor Vehicle Dealer Bond

A Texas motor vehicle dealer bond remains in full force and effect until canceled, or it is determined that the principal has violated the terms of the bond. So long as the dealer maintains their license, they must renew their bond every two years to coincide with the license period. The bond’s effective date is the first day of the month and expires 24 months later on the last day of the month prior to the month that the bond was issued. For example, a bond issued on January 1st, 2017 will expire on December 31st, 2019.

How to get a Texas Motor Vehicle Dealer License

Any person planning on buying, selling or exchanging motor vehicles, or otherwise engaging in business as a dealer, directly or indirectly, including by consignment, must receive a general distinguishing number, referred to as a GDN, issued by the Motor Vehicle Division. A person who wants to sell new motor vehicles must also acquire a franchised dealer license from the Motor Vehicle Division.

Each license type has an information packet that walks prospective dealers through the application and describes all documentation necessary to apply for that license type.

  1. Once the application is received, it goes through finance to process the payment. The Texas Comptroller of Public Accounts processes checks and money orders. TxDMV Motor Vehicle Division processes credit card payments. NOTE: A license is not approved when the fees have been processed; this is just the first step toward approval.
  2. Applications are then scanned into the licensing system and given a work item number.
  3. The licensing system then emails a confirmation to the applicant providing the work item number and some other basic information.
  4. Licensing specialists review applications and approve the information submitted or write deficiencies if more information is needed.
  5. If there are any deficiencies, the licensing specialist contacts the applicant to ask for more information.
    1. Phone and/or email will be attempted before mailing a list of items to be corrected.
    2. Please correct any deficiencies (errors) and return the appropriate documentation.
  6. Once the license is approved, it is printed and mailed (along with the dealer plates, if any) to the Texas mailing address listed on the applicant’s GDN application.

Complete licensing information can be accessed from the Additional Resources section of this page.

Take the first step toward becoming licensed by purchasing the Texas auto dealer bond you need quickly and easily!

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Additional Resources

Why The DMV Requires Texas Motor Vehicle Dealers To Be Bonded

Texas Department of Motor Vehicles Forms

Texas Department of Motor Vehicles Dealer License Application Process

Texas Trasportation Code: Sec. 503.004 Buying, Selling, Exchanging, or Manufacturing Vehicles.

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