Texas Auto Dealer Bond: $25,000 TxDMV Requirement
Get your Texas auto dealer bond with same-day approval. Required $25,000 bond (2-year term) for all Texas independent car dealers. A-rated carriers, competitive rates, all credit types accepted.
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Fast approval • Competitive rates
$25,000
Required by Texas TxDMV
$250-$2,500
2-year premium (credit-based)
1 business day
Same-day approval available
2 Years
Matches license term
Texas TxDMV Dealer Licensing Requirements
Complete requirements for obtaining an auto dealer license in Texas, including the mandatory $25,000 surety bond (2-year term).
- Complete Texas DMV dealer license application
- $25,000 auto dealer surety bond (2-year term)
- Garage liability insurance ($100,000 minimum)
- Established place of business with proper zoning
- Valid Texas business registration
- Sales tax permit from Texas Comptroller
- Approved business location inspection
- Background check and fingerprinting
- Completion of required dealer education course
Understanding Texas Auto Dealer Bonds
Texas requires all independent motor vehicle dealers to post a $25,000 surety bond for a 2-year term before obtaining a dealer license. This bond serves as a financial guarantee that dealers will comply with state motor vehicle laws, pay required taxes and fees, and operate ethically.
The Texas Department of Motor Vehicles (TxDMV) mandates this bond to protect consumers from fraudulent practices, ensure payment of state fees, and provide recourse for individuals harmed by dealer misconduct. Note: Franchised dealers associated with a manufacturer may be exempt from bonding requirements.
How Texas Dealer Bonds Work
When you purchase a Texas auto dealer bond, the surety company guarantees to the TxDMV that you will:
- Properly handle title transfers and registrations
- Pay all sales taxes and registration fees
- Provide truthful advertising and vehicle condition disclosure
- Comply with odometer disclosure requirements
- Honor warranties and service commitments
- Maintain required business records
- Operate from an established, properly zoned location
Important: Bond vs Insurance
Your dealer bond protects consumers, not your business. If a claim is paid by the surety, you must reimburse the full amount plus legal costs. This makes the bond a form of credit, not insurance. Maintain strict compliance to avoid costly claims.
Frequently Asked Questions
Common questions about Texas auto dealer bonds
Texas auto dealer bonds ($25,000 for 2 years) cost $250-$2,500 depending on credit. With excellent credit (750+), expect $250-$500 (1-2%). Good credit (680-749) costs $500-$1,000 (2-4%). Fair credit (620-679) ranges $1,000-$1,750 (4-7%). Lower credit may require up to $2,500 (10%). We offer competitive 2-year rates for all credit levels with same-day approval.
Texas requires a 2-year bond term to match the dealer license renewal cycle. This means you pay one premium upfront for the full 2-year period, reducing administrative costs and ensuring continuous coverage throughout your license term.
Texas DMV dealer licensing typically takes 4-6 weeks from application to approval. The bond can be issued within 1 business day. Other requirements like location inspection and education course completion add to the timeline. Start your bond application early to avoid delays.
Yes, Texas requires both a $25,000 surety bond and garage liability insurance ($100,000 minimum). The bond protects consumers from licensing violations, while insurance covers property damage and liability claims. Both are mandatory for TxDMV dealer licensing.
Yes, we have specialized programs for all credit situations. We've secured Texas dealer bonds for applicants with credit scores as low as 500. Rates vary based on credit, but approval is often possible. Our underwriters work with multiple carriers to find the best solution.
The surety company investigates claims filed by consumers or the TxDMV. If valid, they pay up to $25,000. You must then reimburse the surety for amounts paid plus legal costs. Maintain compliance with all TxDMV regulations and consumer protection laws to avoid claims.
No, Texas requires the same $25,000 bond for both new and used vehicle dealers. All independent dealer types need this bond for TxDMV licensing. Note: Franchised dealers associated with a manufacturer may be exempt from bonding requirements.
Texas dealer bonds renew every 2 years to match your license term. We send renewal reminders 60 days before expiration. Most renewals are approved within 1 business day with updated pricing based on current credit. Never let your bond lapse - it results in immediate license suspension.
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Same-day approval • 2-year term • All credit types • A-rated carriers
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