Texas Auto Dealer Bond Guide

What is Texas Auto Dealer Bond?

The State of Texas requires all operational car dealerships to obtain a bond of at least $50,000 in order to run their business in the state. This law pertains to both new and used car dealerships. The Texas Auto Dealer Bond is essentially a contract that ensures a secure and reliable transaction between the customer and the dealership. The Auto Dealer Surety Bond exists to protect the customer from fraud and helps establish a regulatory framework for both dealers and consumers.

Within the contract, there are three parties involved: the principal, the obligee and the surety. For our purposes, the principal is the auto dealership; the obligee is the party that requires the bond (in this case, the Texas Department of Transportation), and the Surety is the insurance company that backs the actual bond.

Bonds are issued for a two-year term and must be renewed at the end of each term. Each bond is issued with an expiration date that falls two years after the issuing date.

Surety Bond Search

You can search for the bond you need in the table below. If the one you are looking for is not there, do not worry. Call us at 866.450.3412 and we will help you get bonded.

How Much Does Texas Dealer Bond Cost?

The pricing of a Texas Car Dealer Bond varies depending on personal credit. To calculate what a surety will cost your business, you can use our cost calculator and obtain a free quote.

+ -

+ =

Surety Bond Cost Calculator

Bond Type Select Your Required Bond Auto Dealer BondCollection Agency BondContractor License BondDebt Collector BondFreight Broker BondMedicare/Medicaid BondMortgage Broker BondRetail & Professional Services BondSchool BondSmall Loan Company BondSports Permit BondTax & Utility BondTelemarketing BondTravel Agent BondAll Other License Bonds

State Requiring the Bond Select Your StateAlabamaAlaskaArizonaArkansasCaliforniaColoradoConnecticutDelawareFloridaGeorgiaHawaiiIdahoIllinoisIndianaIowaKansasKentuckyLouisianaMaineMarylandMassachusettsMichiganMinnesotaMississippiMissouriMontanaNebraskaNevadaNew HampshireNew JerseyNew MexicoNew YorkNorth CarolinaNorth DakotaOhioOklahomaOregonPennsylvaniaRhode IslandSouth CarolinaSouth DakotaTennesseeTexasUtahVermontVirginiaWashingtonWashington D.C.West VirginiaWisconsinWyoming

Surety Bond Amount ($)

Select Your Credit Score Please select Above 700 650 - 699 600 - 649 550 - 599 549 and under

Calculate

* This form is for a rough estimate only.

Send the estimate to my email

Tell us where to send you your FREE estimate

SEND ME MY ESTIMATE!

We'll never share your information with third parties

Thank you for your request!

The ballpark estimate on your premium is: $100 - $167

We've sent a copy of your estimate on your email as well.

Want an exact quote? Simply fill out our online application It's fast and 100% free!

Get a free exact quote Get another estimate

How to Get Licensed:

Getting a surety bond is only one of the Texas Department of Motor Vehicles’ license requirements for auto dealers.

Here are a number of other steps you’ll need to take to complete the application process:

• Choose the type of dealer license you need: The licensing type depends on the kind of auto business you operate
• • For most types of vehicles, you’ll need an independent GDN license (GDN licenses differ for travel trailers, semi trailers, motorcycles, wholesale dealers, motor vehicles)
• • For selling new cars, you’ll also have to get a franchise license
• Secure your business entity documents
• Provide proof of an established and permanent business location, with a registered phone number
• Get an Employer Identification Number (EIN) from the IRS (if applicable)
• Provide personal information and ID for every owner, officer or general partner
• Apply online for your license via the Texas ELicensing Portal, attaching all required documents
• Pay the required license costs: $700 for one GDN license and $90 for each Texas dealer license plate
• Submit your application and obtain your dealer license

Submit all necessary documents to the Texas DMV eLicensing portal. In 2017, the Texas DMV replaced most of their paper document collection with an online portal.

You have to renew your Texas motor vehicle dealer license every two years to continue your operations. You’ll get a renewal notice from the Texas DMV 75-90 days before your license expires. Don’t forget you’ll need to renew your dealer bond at that time as well.

How Can I Get a Texas Dealer Bond?

The application process is easy! Research licensed surety bond insurance companies and fill out their online application. Typically, you will need to submit the following information: business name, business location, point of contact, bond amount and bond date. The surety bond company will calculate a premium according to the information you submit so make sure to submit all the correct information regarding your credit score, legal history and any other important details.

Start your online application here and receive a free quote from us in minutes. Our bonds can be printed online or issued by mail within 24 hours. Once you are approved and have paid the premium, you must hand sign the bond before you can submit the paperwork to the state.

Can I get a Texas Dealer Bond with Bad Credit?

Even if you have a low credit score, tax liens, or even bankruptcy, you can still get a Texas motor vehicle dealer bond with Bryant Surety Bonds.

Applicants with poor credit or other financial issues are typically considered high risk by sureties and are offered higher premiums. Our Bad Credit Program is designed to help you get bonded and get on with your business.

Who Should Get a Texas Dealer Bond?

Under Texas State Laws, all auto dealerships are required to get a Texas Dealer Bond to operate. However, some of the Texas MVD Bond Requirements have changed over the past year.

As of September 1st 2021, Texas Transportation Code Chapter 503 states that all independent mobility motor vehicle dealers in possession of a general distinguishing number must obtain a $50,000 Bond. Prior to September 1st 2021, auto dealerships were able to secure one at $25,000.

The Texas Motor Vehicle Division has decided that in order to better protect consumers against dealers who abused the temporary registration tags, it was necessary to increase the bond cost. However, the state of Texas deemed that this increased bond requirement does not apply to certain dealerships: trailer/semi trailer and non-motorized travel trailers.

City Requirements

We have dedicated pages for several cities in Texas. Navigate to yours if you want to find out more about its specific requirements.

Call us at 866.450.3412 anytime to speak to one of our surety bond professionals. They can help you with the application process and answer all your questions regarding getting bonded in Texas.

Further Reading

About us:

Bryant Surety Bonds

Bryant Surety Bonds, Inc. is a surety bond agency based in Pennsylvania. Licensed in all 50 states and with access to over 20 T-listed, A-Rated bonding companies, we have the contacts, expertise, and top service to provide you with a hassle-free experience, all while offering competitive rates for your surety bond.