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- Retail General Distinguishing Number (GDN) – Allows qualifying dealers to buy, sell, or exchange vehicles at retail and, in applicable circumstances, wholesale.
- Wholesale General Distinguishing Number (GDN) – Allows a dealer to buy and sell vehicles to other licensed dealers and through dealer auctions, but not to the general public.
- Wholesale Motor Vehicle Auction GDN – Allows a qualified wholesale auction dealer to conduct dealer-only vehicle auctions.
- Franchised Dealer License – Required for a franchised dealer selling new vehicles under an authorized manufacturer line-make.
- Converter License – Required for businesses that substantially modify vehicles or install bodies, equipment, or other modifications before retail sale.
- Salvage Dealer License – Authorizes qualifying businesses to buy, sell, repair, or rebuild salvage and nonrepairable motor vehicles.
- Manufacturer License – Applies to businesses that manufacture or assemble new vehicles for sale through franchised dealers.
- Distributor License – Applies to businesses that distribute or sell vehicles to franchised motor vehicle dealers.
- In-Transit License – Applies to drive-a-way operators transporting vehicles in Texas from a manufacturer or other point of origin.
- Vehicle Lessor License – Applies to businesses offering vehicles for leases longer than 180 days.
- Lease Facilitator License – Applies to businesses acting as leasing agents or intermediaries between a vehicle lessor and a person leasing a vehicle.
- Motor Vehicle
- Motorcycle
- Travel Trailer
- Trailer/Semitrailer
- Independent Mobility Motor Vehicle
- What is the most common Texas dealer license?
- The Retail General Distinguishing Number, or Retail GDN, is the basic dealer license used by many independent Texas vehicle dealers. The appropriate GDN category depends on the type of vehicle being sold.
- How many types of Retail GDN licenses are there in Texas?
- Texas Retail GDN authorization is divided into five primary categories: Motor Vehicle, Motorcycle, Travel Trailer, Trailer/Semitrailer, and Independent Mobility Motor Vehicle.
- Do I need more than one GDN if I sell different types of vehicles?
- You may need a separate GDN category for each type of vehicle you intend to sell. For example, selling both motor vehicles and travel trailers can require authorization for both categories.
- Can a retail Texas dealer sell vehicles wholesale?
- A qualifying retail dealer may conduct permitted wholesale transactions with other licensed dealers or through dealer-only auctions. The dealer must still have the appropriate authorization for the vehicles involved.
- Can a Texas wholesale dealer sell cars to the public?
- No. A wholesale dealer license does not authorize direct sales to retail consumers. A dealer that wants to sell vehicles to the general public must obtain the appropriate retail dealer authorization.
- Which Texas GDN allows the sale of new trailers without a franchise license?
- The Trailer/Semitrailer Retail GDN is the GDN category associated with the sale of new utility trailers and semitrailers without requiring a franchised dealer license for those trailers, subject to applicable Texas requirements.
- Do Texas dealers need a surety bond?
- Some Texas dealer license categories require a dealer surety bond while others do not. For example, the Motor Vehicle and Motorcycle Retail GDN categories require a dealer surety bond, while Travel Trailer and Trailer/Semitrailer GDN categories do not.
- Can a Texas dealer operate as a salvage dealer without a separate salvage license?
- Certain independent GDN holders may conduct salvage dealer activities without a separate salvage license when the applicable requirements are satisfied and the activity is conducted at the same licensed business location. Wholesale, wholesale auction, and Independent Mobility Motor Vehicle dealers are excluded from this exception.
- What license is required to sell new cars in Texas?
- A franchised dealer license is generally required to sell new motor vehicles under a manufacturer franchise. The dealer must also have the appropriate GDN authorization when selling used vehicles.
- What license does a business need to modify vehicles before selling them?
- A business that assembles, installs, or substantially modifies a vehicle before retail sale may need a Texas Converter License. Additional franchise and dealer licensing requirements may apply depending on how the converted vehicle is sold.
- What is the difference between a Texas dealer and a vehicle manufacturer?
- A dealer buys and sells vehicles under the authority of a dealer license. A manufacturer assembles or manufactures new vehicles and generally sells those vehicles through franchised dealers rather than directly to consumers.
- What is the difference between a wholesale dealer and a wholesale auction dealer?
- A wholesale dealer purchases and sells vehicles to appropriately licensed dealers and through dealer auctions. A wholesale motor vehicle auction dealer has additional authority to offer vehicles for sale at dealer auctions and conduct dealer-only auctions.
- What is an in-transit dealer license used for?
- An In-Transit License is used by qualifying drive-a-way operators that transport and deliver vehicles in Texas from a manufacturer or another point of origin.
- When is a vehicle lessor license required in Texas?
- A Vehicle Lessor License is required for a person or business offering vehicles for lease for more than 180 days, subject to applicable Texas licensing requirements.
- What does a lease facilitator do?
- A lease facilitator acts as an intermediary or leasing agent between a vehicle lessor and a person leasing a vehicle. The facilitator is subject to the licensing requirements applicable to lease facilitators in Texas.
What Types of Texas Dealer Licenses Are Available?
The Texas Department of Motor Vehicles (TxDMV) issues several different types of dealer licenses, and the license you need depends on the type of vehicles you sell, whether you sell to consumers or other dealers, and what activities your business performs.
The most common license for an independent used-vehicle dealer is a Retail General Distinguishing Number (GDN). However, Texas also issues wholesale, franchised, converter, salvage, manufacturer, distributor, in-transit, vehicle lessor, and lease facilitator licenses.
If your dealership sells more than one category of vehicle, you may need a separate GDN for each applicable category. For example, a dealer that wants to sell both motor vehicles and travel trailers generally needs authorization for both categories.
Texas Dealer License Types at a Glance
Retail General Distinguishing Number (GDN)
A Retail GDN is the basic dealer license used by many independent vehicle dealers in Texas. Retail GDNs are divided into five vehicle categories, and a dealer may need authorization for each category of vehicle it intends to sell.
The five Retail GDN categories are:
A retail dealer may sell qualifying vehicles directly to retail customers from its licensed location. Retail dealers may also conduct qualifying wholesale transactions with other licensed dealers or through dealer-only auctions.
What is a Texas Motor Vehicle GDN?
A Motor Vehicle GDN allows a qualifying dealer to buy, sell, or exchange used motor vehicles. This category can include used cars, trucks, motor homes, and neighborhood electric vehicles.
A Motor Vehicle GDN may also allow qualifying dealers to buy, sell, repair, or rebuild salvage and nonrepairable motor vehicles, subject to applicable Texas requirements.
A Motor Vehicle GDN may authorize the use of dealer temporary tags, buyer's temporary tags, and metal dealer license plates on vehicles covered by the applicable license. A Motor Vehicle GDN also requires the dealer to provide a dealer surety bond.
A Motor Vehicle GDN can be used for qualifying retail sales to consumers as well as qualifying wholesale transactions with other licensed dealers or through dealer-only auctions.
What is a Texas Motorcycle GDN?
A Motorcycle GDN allows a qualifying dealer to buy, sell, or exchange used motorcycles, mopeds, and applicable off-highway vehicles such as ATVs, ROVs, and UTVs, as well as autocycles.
A Motorcycle GDN may also allow the dealer to buy, sell, repair, or rebuild qualifying salvage and nonrepairable motor vehicles.
Dealer temporary tags, buyer's temporary tags, and metal dealer license plates may be used only on vehicles covered by the applicable motorcycle GDN authorization. A Motorcycle GDN also requires a dealer surety bond.
What is a Texas Travel Trailer GDN?
A Travel Trailer GDN allows a qualifying dealer to buy, sell, or exchange used travel trailers.
For Texas licensing purposes, a travel trailer generally refers to a house-trailer-type vehicle or camper trailer that is a recreational vehicle, or is less than eight feet six inches wide or 45 feet long, and is designed primarily for temporary living quarters associated with recreational, camping, travel, or seasonal use. It is not a permanent dwelling and is not a utility trailer, enclosed trailer, or another trailer whose primary function is not human habitation.
A Travel Trailer GDN may also allow qualifying salvage-related activities. Dealer temporary tags, buyer's temporary tags, and metal dealer license plates may be used on vehicles covered by the applicable license.
A Travel Trailer GDN does not require a dealer surety bond.
What is a Texas Trailer or Semitrailer GDN?
A Trailer/Semitrailer GDN allows a qualifying dealer to buy, sell, or exchange new or used utility trailers and semitrailers.
This license category may also permit qualifying salvage-related activities and the use of dealer temporary tags, buyer's temporary tags, and metal dealer license plates on applicable trailers and semitrailers.
A Trailer/Semitrailer GDN does not require a dealer surety bond.
Importantly, this is the Retail GDN category that can authorize the sale of new trailers or semitrailers without requiring the dealer to hold a franchised dealer license for those vehicles, subject to Texas licensing requirements.
What is an Independent Mobility Motor Vehicle GDN?
An Independent Mobility Motor Vehicle GDN applies to dealers selling new and used vehicles that have been converted into mobility vehicles at a specific licensed location.
A mobility motor vehicle is designed to transport a person with a disability. An independent mobility motor vehicle dealer must have the appropriate agreement with the licensed franchise dealer for the underlying chassis and must also hold a Converter License.
Can a Texas Retail Dealer Also Sell Vehicles Wholesale?
Yes. A qualifying Texas retail dealer may sell vehicles at retail to customers and may also conduct qualifying wholesale transactions with other licensed dealers or through dealer-only auctions.
However, the specific license category matters. A Retail GDN does not automatically authorize the dealer to sell every type of vehicle. The dealer must have the appropriate GDN category for the vehicles being sold.
Can a Texas Dealer Operate as a Salvage Dealer Without a Separate Salvage License?
Certain independent GDN holders may conduct salvage dealer activities without obtaining a separate salvage dealer license, provided the applicable Texas requirements are met and the salvage operation is conducted at the same business location for which the GDN was issued.
There are important exceptions. Wholesale dealers, wholesale motor vehicle auction dealers, and Independent Mobility Motor Vehicle dealers are not included in this exception.
Businesses operating as salvage dealers must also comply with applicable tax, identification, inventory, and reporting requirements, which may include a Sales and Use Tax Permit, Sales Tax ID Number, and NMVTIS-related requirements.
What Is a Texas Wholesale GDN?
A Wholesale GDN allows a qualifying dealer to purchase and sell vehicles to other licensed wholesale dealers or through dealer auctions.
A wholesale dealer may not sell a vehicle to a person who does not hold the required dealer license. In other words, a wholesale dealer cannot use a wholesale license to sell vehicles directly to retail consumers from a display area.
A Wholesale GDN can cover qualifying used vehicles, including motor vehicles, motorcycles, and travel trailers. It may also authorize the purchase, sale, or exchange of new or used trailers and semitrailers.
A wholesale dealer does not need a traditional retail display lot, but a wholesale dealer must meet the applicable bonding and location requirements.
Can a Wholesale Dealer Sell Cars to the General Public?
No. A Texas wholesale dealer license is intended for transactions with appropriately licensed dealers and dealer auctions. A wholesale dealer may not sell vehicles directly to the general public.
If a wholesale dealer wants to sell vehicles directly to retail customers, the dealer must apply to change or amend the license to obtain the appropriate retail dealer authorization.
Can a Wholesale and Retail Dealer Share the Same Office?
Texas location requirements can restrict retail and wholesale dealer operations from sharing the same business structure or office arrangement. A different suite number does not necessarily make an otherwise shared location compliant.
Dealers should review the current TxDMV location requirements before attempting to convert a wholesale location into a retail dealership.
What Is a Wholesale Motor Vehicle Auction GDN?
A Wholesale Motor Vehicle Auction GDN is different from a standard wholesale dealer license. It allows a qualifying wholesale auction dealer to offer vehicles for sale through a dealer auction and to conduct dealer-only auctions.
A change from a wholesale license to a retail license requires the appropriate amendment application through the Texas dealer licensing system.
What Is a Texas Franchised Dealer License?
A Franchised Dealer License is required for a dealer selling new motor vehicles under a franchise relationship with a manufacturer or distributor.
A franchised dealer may sell both new and used vehicles. A franchisee that wants to sell used motor vehicles must also obtain the applicable Retail GDN authorization for those used vehicles.
A franchise license is used for new vehicles covered by the applicable franchise and line-make authorization. This can include new motor vehicles, motorcycles, travel trailers, ATVs, ROVs, and other vehicle types depending on the applicable franchise authorization.
Can a Franchised Dealer Have Multiple Locations?
A franchised motor vehicle dealer may be able to operate multiple dealerships in the same city under the same GDN. Each separate dealership location, however, requires the appropriate franchise license.
Franchised dealers are authorized for specific line-makes and must update their licensing when adding or removing applicable line-makes at a location.
What Is a Texas Converter License?
A Converter License is required for a business that assembles, installs, or substantially modifies equipment on a vehicle chassis before the vehicle is offered for retail sale.
A conversion can involve installing a body, cab, special equipment, or other substantial modifications to a previously assembled or manufactured motor vehicle.
A converter is a person or business that performs these modifications before the retail sale of the motor vehicle. The conversion may involve special equipment, but special equipment is not necessarily required for every conversion.
Can a Texas Converter Sell Converted Vehicles Directly to Consumers?
A converter that does not have the appropriate franchise authorization generally cannot sell a new converted vehicle directly to a Texas consumer. Converted vehicles must be sold through a properly licensed franchised dealer authorized for the underlying line-make, subject to applicable Texas requirements.
What Is a Texas Salvage Dealer License?
A Salvage Dealer License applies to a business engaged in buying, selling, repairing, or rebuilding salvage motor vehicles and nonrepairable motor vehicles.
A salvage motor vehicle is generally a vehicle that has been damaged, or is missing a major component, to the extent that the cost of repairing it exceeds the vehicle's actual cash value immediately before the damage.
A salvage vehicle may be repaired or rebuilt and, when it meets the applicable requirements, can be titled as a rebuilt vehicle and registered for operation on public roads.
Rebuilt vehicles must meet applicable inspection and title requirements before they can be titled and sold as used motor vehicles.
When Do I Need a Salvage Dealer License in Texas?
A person or business generally needs the appropriate dealer or salvage authorization when buying or selling more than five salvage or nonrepairable motor vehicles in a calendar year, or when rebuilding more than five salvage motor vehicles in a calendar year.
Retail and salvage inventory must be maintained in accordance with applicable Texas requirements, including requirements concerning separation of inventory.
What Is a Texas Manufacturer License?
A Manufacturer License applies to a business that assembles or manufactures new vehicles for sale through franchised motor vehicle dealers, also known as franchisees.
A vehicle manufacturer is not generally permitted to sell the vehicles it manufactures directly to the general public under a manufacturer license. Instead, vehicles are sold through properly licensed franchised dealers.
What Is a Texas Distributor License?
A Distributor License applies to a business that distributes or sells vehicles to franchised motor vehicle dealers.
A distributor may act as an intermediary between a vehicle manufacturer and franchised motor vehicle dealers and is subject to the applicable Texas licensing requirements.
What Is a Texas In-Transit License?
An In-Transit License applies to a drive-a-way operator that transports and delivers vehicles in Texas from a manufacturer or another point of origin.
Qualifying drive-a-way operators may apply for, receive, and attach metal in-transit license plates to vehicles they are authorized to transport.
What Is a Texas Vehicle Lessor License?
A Vehicle Lessor License is required for a person or business that offers vehicles for lease for more than 180 days.
Texas licensing requirements also restrict the use of the words "lease" or "leasing" in a dealership name unless the dealer holds the appropriate vehicle lessor authorization.
Retail dealers, wholesale dealers, and vehicle lessors must also comply with applicable office and location requirements concerning shared business locations.
What Is a Texas Lease Facilitator License?
A Lease Facilitator License applies to a person or business that acts as a leasing agent or intermediary between a vehicle lessor and a person leasing a vehicle.
A lease facilitator helps arrange or facilitate the lease transaction but is not the vehicle lessor simply because it facilitates the transaction.
Retail dealer and lease facilitator operations are subject to applicable Texas office-sharing and location requirements.
Can a Lease Facilitator Share an Office With Another Dealer?
A lessor or lease facilitator may be subject to specific restrictions concerning shared office space with another dealer or business. An exception may apply when the other dealer or business is 100% owned by the same lessor or lease facilitator.
Which Texas Dealer License Do I Need?
The correct Texas dealer license depends primarily on what you sell, whether the vehicles are new or used, who you sell to, and what your business does with the vehicles.
For example, an independent dealer selling used cars directly to consumers will generally look at the Motor Vehicle Retail GDN. A business selling only to licensed dealers may instead need a Wholesale GDN. A business selling new vehicles under a manufacturer franchise needs the appropriate Franchised Dealer License, while a business modifying vehicle chassis before retail sale may need a Converter License.
Because Texas dealer licensing requirements depend on the exact business model, vehicle types, location, and activities, it is important to identify the correct license category before applying.
Frequently Asked Questions About Texas Dealer Licenses
Texas Dealer License Requirements Can Depend on Your Business Model
Choosing the correct Texas dealer license is one of the first and most important steps when starting a dealership. The answer is not simply whether you want to "sell cars." Texas licensing is based on the type of vehicles involved, whether they are new or used, whether sales are retail or wholesale, and whether your business performs additional activities such as salvage, vehicle conversion, manufacturing, distribution, leasing, or vehicle transportation.
Before applying for a Texas dealer license, identify every type of vehicle and every type of transaction your business plans to conduct. Selecting the correct license category from the beginning can help prevent delays, amendments, or licensing problems later.
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