(Pre-Executed) Motor Vehicle Dealer's Surety Bond
Required for used motor vehicle dealers in Texas to obtain and maintain their dealer license. Protects consumers and the state from fraudulent business practices.
Fast approvals and straightforward guidance.
— Josh A., Los Angeles, CA via Google
Simple, fast, and dealer-ready
Why Choose Us
Licensed Agents
Bond experts
US-Based Support
Real help, fast.
Fast Turnaround
Quotes in minutes.
Competitive Rates
Top carriers, low rates.
Details
About This Bond
The Motor Vehicle Dealer's Surety Bond is a financial guarantee required by the State of Texas for businesses engaged in buying and selling used motor vehicles. This bond ensures that dealers comply with state regulations and conduct business in an ethical manner.
Who Needs This Bond: Used motor vehicle dealers operating in Texas must obtain this bond as part of their licensing requirements. Each dealership location requires a separate bond, and all lot addresses must be specifically listed on the bond form. Dealers operating in multiple cities need separate licenses and bonds for each city.
Protection and Coverage: The $50,000 bond protects consumers and the state against financial losses resulting from the dealer's failure to comply with applicable laws and regulations. This includes protection against fraudulent practices, failure to transfer titles properly, or other violations of motor vehicle dealer regulations.
Bond Terms: This bond has a 2-year term and must be effective on the first day of a month, expiring at the end of the month two years later. The bond is renewable upon expiration. Texas requires an embossed seal on all Power of Attorney documents - sticker seals are not acceptable.
Here's how it works
1. Share the basics
A few quick questions. No paperwork.
2. See your options
Clear quotes. No surprises.
3. Get covered
We'll take it from here.
At a glance
Texas Auto Dealer Bond Key Facts
Governed by Tex. Transp. Code § 503.033.
The basics
What Is an Auto Dealer Bond in Texas?
A Texas auto dealer bond is a $50,000 surety bond you must file with the Texas Department of Motor Vehicles (TxDMV) to get or renew a motor vehicle dealer license — called a General Distinguishing Number, or GDN. Texas requires it for independent (used-car), motorcycle, wholesale, and wholesale auction dealers under Transportation Code § 503.033. Franchised (new-car) dealers, trailer and semitrailer dealers, and non-motorized travel trailer dealers do not have to post it.
Good to know - Required for most Texas dealers. A $50,000 surety bond is needed to get or renew a motor vehicle dealer or wholesale motor vehicle auction General Distinguishing Number (GDN) — this covers independent (used-car), motorcycle, and wholesale dealers. Franchised (new-car) dealers, trailer and semitrailer dealers, and non-motorized travel trailer dealers do not have to post the bond.
The bond is a promise that you will follow Texas dealer law — that you will pay the bank drafts and checks you write to buy vehicles, and that you will transfer a good, clear title to every vehicle you sell. If you break that promise, someone you harmed can file a claim against the bond.
The bond protects the public, not the dealer. A buyer, seller, or lender who wins a court judgment against you for damages and reasonable attorney’s fees — for an act covered by the bond during your license period — can recover from the bond, up to the full $50,000. If the surety pays a claim, you must pay the surety back.
Texas raised the bond amount from $25,000 to $50,000 for new and renewal applications submitted on or after September 1, 2021. The bond must stay active for as long as you hold your GDN license.
Qualification
What You Need to Qualify for a Texas Auto Dealer Bond
Approval depends on your dealer license type, required coverage amount, and underwriting factors such as credit.
- You are applying for, or renewing, a Texas General Distinguishing Number (GDN) motor vehicle dealer, motorcycle dealer, wholesale dealer, or wholesale motor vehicle auction license through the TxDMV.
- Your GDN type needs the bond: independent motor vehicle, motorcycle, wholesale, and wholesale auction dealers must post a $50,000 bond. Trailer/semitrailer, non-motorized travel trailer, and franchised (new-car) dealers do not.
- Your bond is written by a surety company approved by the TxDMV and is set for the full two-year license period.
- You have a genuine business location that meets the TxDMV premises rules (display space and set office hours for your GDN type).
- New independent motor vehicle GDN applicants have completed the required TxDMV pre-licensing dealer education course.
- You have your business details ready — legal name, ownership, Texas dealership address, and any assumed name (DBA) filing — for the bond and the eLICENSING application.
Step by step
How to Get an Auto Dealer Bond in Texas: Step by Step
Confirm your license type and bond requirement
Pick the GDN license that matches what you sell. Independent (used-car), motorcycle, wholesale, and wholesale motor vehicle auction dealers must post the $50,000 bond. Trailer/semitrailer, non-motorized travel trailer, and franchised (new-car) dealers do not.
Complete the required dealer education
New independent motor vehicle GDN applicants must finish the TxDMV pre-licensing dealer education course (about six hours, online) before they apply. You upload your certificate of completion with your application. This one-time course is not required for trailer, wholesale-only, or franchised dealers.
TxDMV Dealer Education RequirementsSet up a qualifying business location
Line up a real dealership location that meets the TxDMV premises rules for your GDN type — enough display space, permanent signage, and set business hours (retail dealers must be open at least four days a week for four straight hours a day; you cannot operate by appointment only).
Dealership Premises Checklist (MVD_LF628)Get your $50,000 surety bond
Buy your Texas Motor Vehicle Dealer’s Surety Bond and we handle the paperwork. We issue the $50,000 bond on the official TxDMV bond form for the two-year license period and provide it for your application — in most cases we can help file it electronically for you. There is no bond form for you to fill out or sign.
Apply online through eLICENSING and pay your fees
Create an eLICENSING account and complete your GDN application. Upload your surety bond, education certificate (if required), owner IDs, and proof of your location, then pay the $700 license fee per category plus $90 for each metal dealer plate.
eLICENSING User Guide (Independent GDN)Keep your bond and license active
Your GDN license and its bond run for two years. Renew before they expire and keep the bond in force the whole time — Texas requires continuous coverage, and a lapse puts your license at risk.
Paperwork
Texas Dealer Bond Forms & Documents
The official $50,000 state bond form. We issue this for you and, in most cases, help file it through eLICENSING — you do not fill it out yourself.
View formThe notice that tells customers how to file a bond claim. Post it at your dealership; we provide it with your issued bond.
View formTxDMV’s step-by-step guide to completing your GDN application online.
View formWhat your business location must have to pass the TxDMV site check.
View formYou'll also need
Cost
How Texas Auto Dealer Bond Pricing Works
You do not pay the $50,000. That figure is the bond’s coverage — the most that claims can collect. You pay a premium, which is a small percentage of the $50,000 bond amount.
Your premium is set by underwriting, based mainly on your personal credit. Well-qualified applicants pay a low rate; higher-risk applicants pay more. The premium is separate from your TxDMV fees — the $700 GDN license fee and $90 per metal dealer plate.
Worked example
Every bonded Texas GDN dealer posts the same $50,000 bond. You do not pay $50,000 — you pay a premium on that amount, often a few hundred dollars for the two-year term for well-qualified applicants. Start a quote to see your rate.
Filing
Filing Information
Texas Department of Motor Vehicles (TxDMV) — Dealer Licensing
Filing notes
Texas dealer licensing is done online through eLICENSING. Your $50,000 surety bond is uploaded with your GDN application — the TxDMV must have an accepted bond on file before your license is issued or renewed.
The bond must be set for the full two-year license period: it begins on the first day of a month and expires on the last day of the month two years later (for example, 9/1 through 8/31 two years on).
Coverage must stay continuous with no gap. We issue your Texas Motor Vehicle Dealer’s Surety Bond and provide it to you to upload — in most cases we can help file it electronically for you.
FAQ
Texas Auto Dealer Bond FAQ
Yes, for most dealers. Texas requires a $50,000 surety bond to get or renew a motor vehicle dealer or wholesale motor vehicle auction General Distinguishing Number (GDN) under Transportation Code § 503.033. Franchised (new-car) dealers, trailer/semitrailer dealers, and non-motorized travel trailer dealers are exempt.
It is $50,000 for every dealer that needs one. Texas raised the amount from $25,000 to $50,000 for applications submitted on or after September 1, 2021. You pay only a premium — a small percentage of the $50,000 — not the full amount.
Franchised (new-car) dealers licensed by the TxDMV, trailer and semitrailer dealers, and non-motorized travel trailer dealers do not have to post the bond. Independent (used-car), motorcycle, wholesale, and wholesale auction dealers do.
Two years, matching your GDN license period. The bond begins on the first day of a month and expires on the last day of the month two years later, and it must stay in force with no lapse for the whole license term.
Yes. Wholesale motor vehicle dealers and wholesale motor vehicle auction GDN holders must post the same $50,000 bond. Only trailer/semitrailer, non-motorized travel trailer, and franchised dealers are exempt.
It backs your promise to pay the drafts and checks you write to buy vehicles and to transfer a good, clear title on every vehicle you sell. A buyer, seller, or lender who wins a court judgment against you for a covered act can recover from the bond, up to the full $50,000.
You pay a premium, not the full $50,000. The premium is a small percentage of the bond amount, based mainly on your credit, and it is separate from the TxDMV’s $700 license fee and $90-per-plate fee. Start a quote to see your rate.
You file it online through the TxDMV eLICENSING system by uploading the bond with your GDN application. The TxDMV must have an accepted bond on file before it issues or renews your license. Questions: 1-888-368-4689.
Sources
Last verified 2026-07-01. Requirements change - confirm current details with Texas Department of Motor Vehicles (TxDMV) — Dealer Licensing before you file. This page is informational and not legal advice.
FAQ
Texas Auto Dealer Bond Questions
The cost of a Texas auto dealer bond is usually a small percentage of the state-required bond amount. Your exact premium depends on the bond amount, license type, business details, and underwriting factors such as credit.
Many auto dealer bonds can be issued the same day after you complete the application. Larger bond amounts or applications that need underwriting review may take longer.
Requirements vary by license type, but most Texas auto dealers need to complete a short application and purchase the bond amount required by the state before their license can be issued or renewed.
Often, yes. Many states have separate bond requirements for wholesale, retail, broker, or other dealer license types. Choose the bond that matches your Texas license instructions.
Ready to get started?
Have questions? Call or text +1 (888) 900-8038 to talk with a specialist or
Explore
Contact
Simple. Fast. Trusted
Shield Liability Insurance Agency
515 S Flower ST, Fl 18, Los Angeles, CA 90071
© 2026 Shield Liability Insurance Agency | Privacy Policy | Terms of Service | Contact
AutoDealersBond.com is operated by Shield Liability Insurance Agency, a California and Texas licensed insurance agency (CA License #6018195, TX License #3446536). Shield Liability Insurance Agency is not an insurance carrier and does not underwrite bonds or insurance policies. Bond and coverage availability, pricing, and issuance are subject to carrier underwriting approval, eligibility, applicable state requirements, and policy or bond terms. Availability varies by state.
