10 Steps to a Texas Dealers License (General Distinguishing Number )

10 Steps to Obtain a General Distinguishing Number (GDN)

1. Dealer Educational Course
Any person applying for a
Texas Dealers License or General Distinguishing Number for the first time or licensed for the first time is required to take a 6-hour web-based dealer educational course. Any person that has had a TX Dealer License less than 10 years as of September 1, 2009 is also required to take the 3-hour web-based Texas dealer license educational course. You will receive a Certificate of Completion at the end of this course. Be sure to enclose the certificate in your dealer license application submission. When you complete your online training, you will be confident and prepared to operate a licensed Texas dealership. You must submit your dealer license application through the TxDMV eLicensing website. Your application must be submitted online and can no longer be mailed. We cover the application process extensively in your dealer training course. You may 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. We will ensure you know how to apply correclty for quicker dealers license approval..

2. Business Building
You must have a place of business to gain a
Texas Dealers License.  The building must meet all local zoning requirements. You must have an office in the building for the operation of your dealership and you are required by law to display your Dealer License. If the office is located at a private residence, it must be completely separate from the actual residence and must meet the 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 dealer shares their location with another business, the dealer must have their own office area. The dealer must own the property where the license is located or must lease the property for the entire term of the dealer’s license. The State allows up to four retail dealers or not more than 8 wholesale dealers to operate out of one business building. We cover the building require more extensively in your online Texas dealer training course.

3. Display Area
You must have a display area has sufficient space to display 5 of the vehicle types the dealer is selling. The display area may be located outside of the building or inside the building. The display lot cannot be a driveway and must be a hard surface such as concrete or gravel. Some local zoning ordinances may require a dealer display lot to be paved. The lot must meet all local zoning requirements. If a dealer is going to operate at night the display area must be illuminated. Wholesale vehicle dealers are exempt from the display area requirement. You will learn more in your dealer course.

4. Dealer Surety Bond
You must obtain a $25,000 dealer surety bond in order to obtain an
Texas Used Motor Vehicle Dealer's License. With good credit you should be able to get a 25,000 dealer surety bond for $200 to $300 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 dealer surety bond requirement. We cover dealer bonds in depth in your dealer license training.

5. Business Sign
You will need a permanent business sign that is visible from the public roadway. The dealership name on the sign must be at least 6 inches or larger. The sign must be permanent in nature and be 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 2 inch letters. Be sure the letters in the dealership name meet the minimum height requirements under Texas law.

6. Business Hours
A retail
Texas dealer must be open at least 4 days a week for at least 4 consecutive hours per day. A wholesale dealer must be open at least 2 days per week for at least 2 consecutive hours per day.  Travel trailer and trailer/semi-trailer dealers may operate 7 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 Saturday and Sunday. Motor vehicles may only be sold on a Saturday or Sunday, never on both days. We will discuss hours of operation extensively in your 6 hour web-based dealer license class.

7. Records
You must maintain records on all vehicles purchased, leased, and sold for a minimum of 48 months.  Just copy every document that comes accross your desk. We will review an entire section on exactly what records to keep in your licensing course.

8. Register Business Name with Texas Secretary of State
You must register your business name with the Texas Secretary of State’s office. The Texas Secretary of State wants to have a record of every business that is operating the in the state. Registering your business with the Secretary of State is covered in great detail in your dealer training course. We walk you step by step through the entire SOS registration process, it is very easy.

9. Employer Identification Number (EIN)
Before submitting your dealer application you must obtain a Employer Identification Number which is also known as an EIN. This number is used to identify the new business you are starting and will be needed for tax purposes. Obtaining this number is a very quick and easy step that will only take a few minutes. You can easily apply online and have your new Employer Identification Number in a matter of moments. After you have been assigned your EIN be sure to include it on your dealer license
submission. We will cover the EIN registration extensively in the course.

10. Follow all State and Federal Laws
In your dealer license training course we are going to show you how to comply with all State laws that come out of Austin and the Federal laws that come out of Washington. If you follow every state and federal law you will be able to 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 possibly 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.



We are here to help you start obtain a Texas Dealers License (GDN)!

Texas Dealer License

Delus Johnson-Lead Instructor
Automobile Dealer Training Association