When starting a career as a motor vehicle dealer, applying for a license may sound daunting. Luckily, the process can be broken down into a series of simple steps.
If you are planning on selling or exchanging any motor vehicles—new or used—in the State of Texas, you will need to apply for a “General Distinguishing Number,” or GDN, from the Motor Vehicle Division. There are several different types of GDN licenses. These include licenses for motorcycle dealers, trailer dealers, and wholesale dealers. If you need more than one GDN, you may submit more than one application. A list of all GDN license types can be found here. Once you determine the type of GDN you need, submit an application. Do this by going to your local DMV or by downloading the online application, available here. This application requires a detailed financial statement and photos of your dealership’s location and signage. More specific instructions can be found on the application. If you plan on selling new cars, you will need more than a GDN. You’ll need to obtain a zoning plan and a franchise agreement with the company you’ll be representing. [1. “Dealer License Application Process”. Texas Department of Motor Vehicles. http://www.txdmv.gov/dealers/licensing/dealer-license-application-process]
You’ll need to get the proper zoning to sell cars in your municipality. To do this, simply contact your local zoning officer. They typically work within your county or city’s treasury office.[1. Hogan, Michelle. “How to Become a Licensed Car Dealer in Texas”. The Houston Chronicle. http://smallbusiness.chron.com/become-licensed-car-dealer-texas-16015.html]
Car dealerships in the state of Texas require a surety bond in the amount of at least $25,000. An easy online application can be found here. Surety1 makes this process quick and simple. Make sure your bond is signed and has the appropriate dates listed.
The Texas Secretary of State provides many of the forms you will need for your license application.
In almost all cases, new car dealerships require an Assumed Name Certificate. These can be obtained through the Texas Secretary of State. Remember, an Assumed Name Certificate does not work the same way as a trademark. [1. Akalp, Nellie. “Doing Business As: What Is It and Do You Need It?” Fresh Books Cloud Accounting. May 7, 2013. https://www.freshbooks.com/blog/doing-business-as/] Make sure you’re using a legal and unprotected name. More information on how to get an Assumed Name Certificate can be found here.[1. “Name Filing FAQs”. Texas Secretary of State. http://www.sos.state.tx.us/corp/namefilingsfaqs.shtml]
You will also need to get a certificate of incorporation, corporation, or partnership. The necessary forms for this can be found here.[1. Texas Secretary of State]
Tie up any loose ends and gather all of the paperwork the application requires. Be ready to provide a valid photo ID of one of the owners and a detailed map showing where your dealership is. Once your information is good to go, take the final application and the money for the processing fee to a DMV office.
Once the DMV receives your application, they will process the payment. Then they will give your application a Work Item Number. After this, you will receive an email with your application’s Work Item Number. This is for your reference and does not mean your license has been approved. Once it is reviewed and approved, it will be mailed to the Texas mailing address on your GDN application.[1. “Dealer License Application Process”. Texas Department of Motor Vehicles. http://www.txdmv.gov/about-us] After this, your dealership will be ready to operate!