7 Steps to a Texas Dealers License
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7 Steps to Obtain a Texas Dealer License (General Distinguishing Number)

1. Take Online Dealer Educational Course
2. Must Have A Business Building With Sign and Display Area
3. Apply For Employer Identification Number
4. Register with Secretary of State or County
5. Obtain Dealer Surety Bond
6. Submit Application Through eLICENSING
7. Maintain Business Hours and Records

1. Dealer Educational Course

Many persons applying for a Texas Dealer License or General Distinguishing Number (GDN) for the first time must take a six-hour web-based dealer educational course. The course is required if selling cars, trucks, motor homes, neighborhood electric vehicles, recreational off-highway vehicles, atvs, and utvs. The course must be taken by an owner or manager that is listed on the application. The Automobile Dealer Training Association's Dealer Pre-License Course is approved by the Texas Department of Motor Vehicles and meets the State of Texas' 6 hour dealer educational requirement. Click here to enroll now!

Most dealers that were licensed as a Texas Dealer License for the first time after September 1, 2009 must take a three-hour web-based Texas Dealer License educational course.

You will receive an Official Certificate of Completion at the end of this course. Be sure to upload the certificate in with dealer license application submission. When you complete your online training, you will be confident and prepared to operate a licensed Texas dealership.

2. Business Building With Sign and Display Lot

You must have a place of business to gain a Texas Dealer License. The building must meet all local zoning requirements and include an office for the operation of your dealership. If the office is at a private residence, it must be completely separate from the actual residence and meet zoning requirements from that city or county. Your office must include, at minimum, a desk, two chairs, internet access, and a working telephone listed in your dealership name.

If a Texas dealer shares their location with another business, the dealer must have their own office area. The dealer must either own the property where the license is located or lease it for the entire term of the dealer’s license. The law requires you to display your dealer license.

You must have a display lot either inside or outside the building with sufficient space to show five of the vehicle types you are selling. The display lot must not be a driveway and must be a hard surface such as concrete or gravel. Some local zoning ordinances may require you to pave the area.

As with the building, the lot must meet all local zoning requirements. If a dealer operates at night, the display area must be illuminated. Wholesale vehicle dealers are exempt from some display area requirements. You will learn more in your dealer course.

The State allows up to four retail dealers and up to eight wholesale dealers to operate out of one business building. Retail dealers and wholesale dealers in Texas may never share the same building they must operate in separate dealer buildings. You will need a permanent business sign which is visible from the public roadway. The dealership name must be at least six inches tall or larger, and the sign must be permanent and clearly visible to the public. Wholesale dealers must have the sign mounted on or next to the office door with the business name in at least two-inch letters. Be sure the letters in the dealership name meet the minimum height requirements under Texas law. We cover the building, sign, and display specifications more extensively in your online training course.

3. Employer Identification Number (EIN)

Before submitting your dealer application, many persons must obtain an Employer Identification Number (EIN). This number identifies your new business, and you will need it for tax purposes. Securing this number is a quick and easy step, which only takes a few minutes. You can apply online and have your new Employer Identification Number in a matter of moments. Once you have received your EIN, be sure to include it on your dealer license submission. We will cover the EIN registration extensively in the course.

4. Register Business Name with Texas Secretary of State or County

Most dealers must register their business name with the Texas Secretary of State, which must record every business operating in the state. Registering your business with the Secretary of State is covered in great detail in your dealer training course. Certain business entities will only register with the county in which they are located. We will walk you step by step through the simple registration process.

5. Dealer Surety Bond

Most dealers must secure a $50,000 dealer surety bond to get a Texas Used Motor Vehicle Dealer License. With good credit, you should get a $50,000 dealer surety bond for $200 to $350 per year. If you have a couple of blemishes on your credit score, the price can be much higher. Franchised dealers, travel trailer dealers, and utility/semitrailer dealers are exempt from the surety bond requirement. We cover dealer bonds in depth in your dealer license training.

6. Submit Application Through eLICENSING

You must submit your Texas dealer license application online through the Texas Department of Motor Vehicles’ eLICENSING system. Applications are no longer mailed. Submit your dealer license application at https://texasdmv.force.com/customers/lace_login . The application process is quite extensive and must be completed correctly and in its entirety. Mistakes on your dealer application can cause significant delays in your licensing process. We will submit a dealer license application online in your dealer training course and ensure you know how to apply correctly for quicker approval.

7. Maintain Business Hours and Records

A retail Texas dealer must be open at least four days a week for at least four consecutive hours per day. A wholesale dealer must be open at least two days per week for at least two consecutive hours per day. Travel trailer and trailer/semi-trailer dealers may operate seven days a week. If a person holds a motor vehicle license and a trailer license, they may open on Saturdays and Sundays but cannot sell motor vehicles on both Saturday and Sunday. Motor vehicles may only be sold on Saturday or Sunday, never on both days. We will discuss hours of operation extensively in your six-hour web-based dealer license class. You must also maintain records on all vehicles purchased, leased, and sold, for a minimum of 48 months. Just copy every document that comes across your desk. We will review an entire section on exactly which records to keep in your course.

You Must Follow all State and Federal Laws

In your Texas dealer license training course, we will show you how to comply with all state laws that come out of Austin and all federal laws that come out of Washington. If you follow every state and federal law, you will achieve much higher profits. If you maintain 100 percent compliance, you will maintain 100 percent profits. The Texas Department of Motor Vehicles is basically giving you a license to make as much money as you can, as long as you are following ALL the rules. In your Texas Dealer License course, we will show you how easy it is to follow all the rules.

Click here to view more information on How to Get a Dealer License in Texas

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Delus Johnson-Lead Instructor
Automobile Dealer Training Association