Question 1

What bond do auto dealers need in Texas?

Accepted Answer

Texas auto dealers must maintain a $50,000 General Distinguishing Number (GDN) surety bond with the Texas Department of Motor Vehicles (TxDMV) as a condition of their dealer license under Texas Transportation Code §503.033. The GDN bond protects consumers and the state from dealer fraud, title violations, odometer rollback, and failure to remit sales tax. All dealer license categories require the same $50,000 bond amount.

Question 2

How much does a Texas auto dealer bond cost?

Accepted Answer

A Texas GDN dealer bond ($50,000) costs $100–$300 per year depending on credit score and dealership history. Well-qualified dealers with strong credit pay around $100/year (0.2% of the bond amount). Quantum Surety issues GDN dealer bonds same-day with instant PDF delivery accepted by TxDMV for new license applications and annual renewals.

Question 3

Do all types of Texas auto dealers need a GDN bond?

Accepted Answer

Yes. All TxDMV dealer license categories require a $50,000 GDN surety bond, including: independent (used) dealers, franchised (new car) dealers, wholesale dealers, salvage dealers, motorcycle dealers, and trailer dealers. The bond amount is the same ($50,000) regardless of dealership size or vehicle type.

Question 4

What happens if my Texas dealer bond lapses?

Accepted Answer

If your GDN dealer bond lapses, TxDMV will deactivate your dealer license. Without an active license, you cannot legally buy, sell, or title vehicles in Texas as a dealer. Continued operation without a valid license and bond is a Class A misdemeanor. Renewing your GDN bond before expiration is critical — Quantum Surety sends renewal reminders 60 days in advance.

Texas Auto Dealer Bond

Dealer Types Requiring a Bond