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Dealer Licensing in Texas

Texas is a very big state, and reliable vehicles are a necessity for getting around its wide-open spaces. With so many Texans owning motor vehicles, the auto sales industry boasts high-volume turnover.

To regulate this trade, the state subjects Texas automobile dealers to many legal restrictions and requirements. Number one among the requirements is that you fill out application forms―stacks of them.

The Texas Department of Transportation offers a dealer manual, and a dealer an Independent (GDN) Licensing page that will help you understand all requirements and regulations.

Application Requirements

General Distinguishing Number

For a new dealer in Texas, the first step is to obtain a General Distinguishing Number (GDN) (Form LF001). This requires, among other things, a permanent place of business, signage in accordance with regulations, and sufficient space to display the required number of vehicles of the type you intend to sell.

You'll need a GDN whether you sell new cars or used. If you also (or instead) sell motorcycles, RVs, or other trailers, you'll need a separate GDN for each class of vehicle.

The necessary forms can be downloaded in PDF format from the Texas Department of Motor Vehicles licensing forms page.

Note that franchise dealers (new vehicles) and independent dealers (used vehicles) have different forms and instructions, so be sure to download the appropriate files. The licensing forms page also provides handy links to the portions of the Texas legal code that apply to both new and used auto dealers, so it's quite a useful resource.

Application Process

Each license type has an information packet that walks you through the application process. Detailed information can be found at the DMV'sDealer License Application Process webpage.

  1. Once the application is received, your payment will be processed.
  2. Applications are then scanned into the system and a Work Item Number will be given.
  3. A confirmation e-mail containing the work item number and some other basic information will be sent to you.
  4. Licensing specialists will next review your applications and approve the information submitted or write deficiencies if more information is needed.
  5. If there are any deficiencies, the licensing specialist will contact you by phone or e-mail and ask for more information.
  6. Once your license is approved, it will be printed and mailed (along with your dealer plates, if any) to your Texas mailing address listed on your GDN application.

Additional License Types

Other dealer business licenses offered by the Department of Motor Vehicles include:

  • Independent Motor Vehicle
  • Independent Motorcycle
  • Travel Trailer
  • Trailer/Semitrailer
  • Wholesale Dealers
  • Wholesale Motor Vehicle Auction
  • Independent Mobility Motor Vehicle Dealer License

Learn more on the TX DPS Independent (GDN) License page.

Further Resources

Applicants may benefit from networking with the major car dealer associations in Texas during the application process. These organizations also offer seminars, classes, and other support for would-be dealers. The Texas Independent Automobile Dealers Association specializes in used car dealers, while the Texas Automobile Dealers Association primarily serves the franchised new car dealer community.

The State of Texas also offers seminars designed to guide dealer applicants through the process and make sure they have enough information to operate their businesses in accordance with the many laws that apply to them. Read our Dealer-Related Information article for more details.

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