Texas Auto Dealer Bond— $50,000 TxDMV GDN Requirement

It is $50,000. Texas Transportation Code Section 503.033 requires a $50,000 surety bond for issuance or renewal of a motor vehicle dealer GDN or wholesale motor vehicle auction GDN. The $25,000 figure still circulating on older websites and forums was the pre-2021 amount: HB 3533 (87th Texas Legislature) doubled it to $50,000 effective September 1, 2021, and TxDMV has required evidence of the $50,000 bond on every new and renewal GDN application submitted since that date. No Texas dealer qualifies for a $25,000 bond today.

You must upgrade to a $50,000 bond. HB 3533 applies prospectively, meaning TxDMV requires evidence of a $50,000 bond with every GDN renewal application submitted on or after September 1, 2021 — there is no grandfathering at the old amount. Because Texas GDNs renew on a 2-year cycle, every active dealer has now passed through at least one renewal under the new rule. If your bond paperwork still shows $25,000, contact your surety before your renewal window opens; TxDMV will not renew a GDN without a current $50,000 bond on file. See our renewal guide at buysuretybonds.com/auto-dealer-bonds/texas/renewal/ for the full checklist.

House Bill 3533 (HB 3533), signed into law during the 87th Texas Legislature, doubled the dealer bond requirement from $25,000 to $50,000 effective September 1, 2021. The increase was prompted by rising consumer complaints, temporary tag fraud, and the need for greater consumer protection. The law applies to all new GDN applications and renewals after that date. Existing dealers must have the $50,000 bond at their next renewal. For context on how this compares to other states, see our auto dealer bond cost breakdown at buysuretybonds.com/auto-dealer-bonds/cost/.

A GDN (General Distinguishing Number) is the official term for a Texas motor vehicle dealer license issued by the TxDMV. Texas uses the GDN system rather than a traditional "dealer license" designation. The GDN is your unique identifier as a licensed dealer, is recorded against every metal license plate you issue to buyers through the webDEALER | ePLATE system, and must be displayed at your dealership. The GDN application is processed through the TxDMV eLICENSING online portal. For a walkthrough of the general bonding process, see our guide at buysuretybonds.com/how-to-get-a-surety-bond/.

Yes. Under Texas Transportation Code Section 503.033(i), franchised motor vehicle dealers (those with a manufacturer franchise agreement to sell new vehicles) are generally exempt from the $50,000 surety bond requirement. However, if a franchised dealer also sells used vehicles independently of their franchise agreement, they may need a separate GDN and bond for those operations. Always verify with TxDMV.

The eLICENSING portal (https://txdmv.gov/dealers) is TxDMV's mandatory online system for all dealer license applications and renewals. You create an account, complete the application online, upload supporting documents (bond, insurance, tax permit), pay the $700 fee electronically, and track your application status. Paper applications are no longer accepted for new GDN applications. Note that eLICENSING handles licensing only -- since July 1, 2025, every licensed Texas dealer must also use the separate webDEALER | ePLATE system to electronically process title, registration, and buyer plate issuance for each sale.

Texas requires a permanent enclosed building (not portable, temporary, or a residence) at your dealership location. You must have a permanent sign with your dealer name visible from the primary public road -- banners do not qualify. A separate designated office area is required for record keeping and customer transactions. You need a dedicated operating telephone line. The facility must be properly zoned for motor vehicle dealership use by your municipality or county. TxDMV conducts an on-site inspection before issuing the GDN.

Texas requires a 2-year bond term that matches the GDN license renewal cycle. This is different from most states that use annual bonds. You pay one premium at issuance for the full 2-year period. When your GDN comes up for renewal (every 2 years), your bond must also be renewed for another 2-year term. TxDMV will not renew a GDN without an active, current bond on file.

Paper temporary tags no longer exist in Texas. HB 3927 (2021) was the first crackdown -- it let TxDMV cap how many temporary tags a dealer could obtain and deny tag database access for fraud. HB 718 (2023) then eliminated paper tags entirely effective July 1, 2025: Buyer Tags, Internet Down Tags, Vehicle Specific Tags, and Agent Specific Tags are gone, replaced by metal plates that dealers issue at the time of sale through the mandatory webDEALER | ePLATE system (TxDMV renamed eTAG to ePLATE). Dealers now collect a $10 metal plate fee in place of the old $5 buyer tag fee, and TxDMV still sets plate maximums under Transportation Code 503.0633 based on time in operation, sales data, and expected growth. Plate misuse can trigger TxDMV enforcement against your GDN, and your $50,000 bond backs your compliance obligations as a licensed dealer.

Yes. Each physical dealership location requires its own separate GDN license and corresponding $50,000 surety bond. If you operate a used car lot in Houston and another in Dallas, you need two separate GDNs, two separate $50,000 bonds, and each location must independently pass the TxDMV facility inspection and meet all signage, zoning, and building requirements. This per-location rule is similar to Ohio (buysuretybonds.com/auto-dealer-bonds/ohio/), which also requires separate bonds per site.

Yes. Approval is possible even with credit challenges. While excellent credit (750+) gets the lowest rates at 1-2% of the $50,000 bond amount, we regularly approve applicants with credit scores in the 500-600 range at 5-12%. Given Texas's 2-year term, getting approved with one premium payment covering the full term can be especially beneficial for credit-challenged applicants. Use our auto dealer bond calculator (buysuretybonds.com/tools/calculator/auto-dealer-bond/) to estimate your rate, or learn more about how premiums are determined at buysuretybonds.com/surety-bond-cost/.