Before You Begin
This guide is a general orientation only. It is not legal, financial, tax, or licensing advice. Requirements, fees, and bond amounts are set by the State of Texas and change from time to time.
Always confirm every current requirement directly with the Texas Department of Motor Vehicles before you spend money or submit anything.
The authority on this process
Texas Department of Motor Vehicles (TxDMV), Motor Vehicle Division. Applications, renewals, and amendments are filed online through the department's eLICENSING system.
The definitive reference: The TxDMV Motor Vehicle Dealer Manual, currently published in a 2026 edition incorporating House Bill 718 updates. It is free, thorough, and is what TxDMV actually goes by. There is also an eLICENSING User Guide specifically for Independent GDN licensees.
txdmv.gov — dealers →HB 718 changes →
Welcome — and congratulations
Opening a dealership is a serious undertaking, and the licensing process is the first real test of it. Texas issues dealers a General Distinguishing Number — a GDN — and the license runs on a two-year cycle rather than an annual one. Everything is filed online.
Wayne Reaves has worked alongside independent dealers for years. We are not a licensing service and we do not file on your behalf — but we have watched a lot of people go through this, and we know what the road looks like. This guide lays out the shape of it so you know what is coming.
We would like to be the software that runs your dealership — and the smart move is to put us in place before you open, not after. While you work through licensing, we can be getting your system, your website, and your training ready, so opening day is a sale, not a setup project.
The Shape of the Process
Texas groups this into pre-application work and the online submission itself. Nearly everything is uploaded, so assemble your documents electronically as you go.
- 01
Before you apply
identify the correct GDN classification, complete the required pre-licensing education, register your business entity and any assumed name with the Texas Secretary of State, obtain a federal EIN, secure a location that meets the state's premises requirements with conforming signage, and obtain your surety bond.
- 02
Then apply
create an eLICENSING account, complete the dealer application, upload your supporting documents — bond, Secretary of State certificate of filing, lease or proof of ownership, photographs of the premises and mounted sign, proof of identity for owners and managers — and pay the license and plate fees.
- 03
Then operate correctly
set up webDEALER access through your county tax assessor-collector's office, order and securely store your metal plates, and follow the current title and plate procedures from day one.
Step 1
Choosing your GDN classification
Texas issues the GDN across several classifications — independent (used) motor vehicle, wholesale, wholesale auction, motorcycle, trailer and semitrailer, and others. The classification you hold determines what you may sell and to whom.
This matters financially: the surety bond requirement applies to most GDN types but not all — trailer and semitrailer and non-motorized travel trailer classifications have historically been treated differently, and franchised dealers are handled separately. Confirm which classification fits your business plan and what it requires before you spend anything.
One GDN can cover multiple locations in some circumstances. Texas allows a dealer to list multiple business locations within the same city on the original application, with each additional location required to meet the premises requirements independently. If you are planning more than one lot, raise it at application time rather than afterward.
Step 2
Pre-licensing education
New applicants must complete the required dealer education course and provide proof of completion with the application. Confirm the current course length, approved providers, and any exemptions with TxDMV — course requirements and approved provider lists change.
Step 3
Business registration and EIN
Register your business entity with the Texas Secretary of State, including an assumed name certificate if you will operate under a DBA. TxDMV requires the Secretary of State certificate of filing as part of the application, so this has to be done first.
Which business structure is right for you is a question for an attorney or CPA, not for a software vendor. It affects your taxes, your personal liability, and how your name must appear on the bond and the application — which must match.
Obtain a federal EIN free of charge directly from the IRS. Be cautious of third-party sites that charge for this.
Step 4
Your business location
Texas sets premises requirements covering the office, display space, signage, and accessibility, and requires a copy of your lease or proof of property ownership as part of the application. You will also upload a photograph clearly showing the business structure and the mounted business sign.
Local zoning is a separate matter handled by your city or county, and it is entirely separate from state licensing. Check it before you commit to a property.
Confirm the premises requirements before you sign a lease. The specifics — office dimensions, display area, sign requirements, hours — are set out in the current Dealer Manual and rules. Discovering that a property cannot be licensed after you have signed is the most expensive mistake available in this process.
Step 5
Surety bond
Most GDN applicants must file a motor vehicle surety bond with TxDMV, and no license is issued until an executed bond is on file. Texas is specific about the bond's term: it must be valid for the entire two-year license period, and TxDMV publishes exact requirements for how the term is written.
A bond that cancels mid-cycle without a replacement on file puts the license into administrative suspension. At renewal, a new bond term must be in place or the renewal will not process — many dealers coordinate the bond renewal and the license renewal as a single transaction.
Important: confirm the current required amount, the correct bond form, and the exact term-writing requirements with TxDMV or a licensed surety agent before you buy. Bond amounts and the classifications they apply to are set by statute and have changed. Do not rely on a figure from any document, including an older quote.
Choosing a provider
Wayne Reaves does not sell bonds or insurance, does not recommend a particular agent, and receives nothing if you use one provider over another. Your state association, an independent insurance broker, or a licensed surety agent can help you compare. Get more than one quote — pricing varies considerably based on credit and business history.
Step 6
Insurance and identity verification
Dealers are expected to carry appropriate liability coverage; confirm the current requirements and minimums with TxDMV and tell your agent specifically that the policy is for a Texas dealer license so it is written correctly.
Proof of identity is required for owners and managers. Texas uses fingerprinting through an approved vendor as part of this. Confirm the current vendor, process, and who exactly must be fingerprinted with TxDMV before scheduling — fingerprinting arrangements are among the details states revise most often.
Step 7
Applying through eLICENSING
License applications, renewals, and amendments must be filed online through eLICENSING. After submission, your application is assigned a work item number and reviewed by TxDMV licensing specialists.
All license changes — including closing a license — go through eLICENSING as well, and it is the license holder's responsibility to file a timely and sufficient renewal application there to continue operating. Nobody will do this for you.
Once approved, you receive your GDN. Dealer plates are ordered through your eLICENSING account.
Step 8
Plates, webDEALER, and day-one operations
This is where Texas differs most sharply from other states, and where the recent change bites.
Metal plates at the point of sale: since House Bill 718 took effect, dealer-issued paper temporary tags — buyer's temporary tags, dealer's temporary tags, dealer agent tags, vehicle-specific tags, and internet down tags — have been eliminated. Buyers leave with metal plates installed. A small number of paper permits remain in use for specific situations such as certain commercial vehicles and private-sale transit permits.
webDEALER is not optional: retail motor vehicle transactions the system supports must be submitted through webDEALER. Access is arranged through your county tax assessor-collector's office, so set that up as part of opening rather than after your first sale.
Plates are controlled inventory: metal plates must be securely stored, dealer temporary plates are for business use only and not personal use, and plates that are no longer needed, are damaged, or belong to a closed license must be returned to TxDMV within a short window. Plate issuance is visible to law enforcement through state systems.
Confirm all current plate, permit, and webDEALER procedures directly with TxDMV and your county tax office. These are operational requirements you will use every single day, and getting them wrong is an enforcement matter, not a paperwork matter.
How Wayne Reaves Fits In
We want to be straightforward about what we do and do not do.
What we do not do
We do not file applications, form business entities, sell bonds or insurance, provide legal or tax advice, or interpret state requirements on your behalf. Those belong with TxDMV, your attorney, your CPA, and licensed agents. We receive no compensation or referral fee from bond or insurance providers.
What we do
We build dealer management software and dealer websites for independent dealers — inventory, deal tracking, customer records, reporting, compliance tools, and a website that puts your inventory in front of buyers.
One practical note specific to Texas: between webDEALER submission, metal plate inventory, and vehicle transfer notices, the operational recordkeeping starts on your first sale and does not let up. How you handle it is worth thinking about before you open rather than after.
Get set up before you open
The best time to choose your software is now — while you are still getting licensed. Notice how much of this process is really about how your dealership will keep records: titles, deal files, tax paperwork, books kept at your location. That is exactly what Wayne Reaves handles from day one. Dealers who get set up with us during licensing open their doors ready — inventory loaded, forms and deal paperwork in place, recordkeeping organized the way inspectors and auditors expect, and a website already live when the first customer searches for you.
Sign up while your application is in motion and we will have your system configured, your team trained, and your website built by the time the license is issued — so your first sale runs like your hundredth. We have been helping independent dealers open and grow since 1987, and getting started is simple: request a demo or call us, and we will walk you through it.
Where to Get Answers
| Question about… | Ask |
|---|---|
| Licensing requirements, classifications, fees, status | TxDMV Motor Vehicle Division · txdmv.gov · eLICENSING portal |
| The detailed rules | TxDMV Motor Vehicle Dealer Manual (current edition) and the eLICENSING User Guide for Independent GDN Licensees |
| Plates, permits, and the HB 718 changes | TxDMV's HB 718 pages at txdmv.gov/dealers/HB718 |
| webDEALER access and title transactions | Your county tax assessor-collector's office |
| Current bond amount, form, and term requirements | TxDMV or a licensed surety agent — verify before purchasing |
| Premises and signage requirements | TxDMV, before you sign a lease |
| Pre-licensing education providers | TxDMV's current approved provider list |
| Business structure and entity formation | An attorney or CPA; register with the Texas Secretary of State |
| Federal EIN | Directly with the IRS (free) |
| Fingerprinting and identity verification | The approved vendor named in TxDMV's current instructions |
| Liability insurance | A licensed insurance agent |
| Zoning at a specific address | Your city or county zoning office |
| Boat and marine dealer licensing | Texas Parks & Wildlife Department — not TxDMV |
| Federal advertising, Buyers Guide, and financing rules | An attorney or your state association |
| Dealer software and websites | Wayne Reaves Computer Systems Inc. |
Disclaimer
This guide is provided by Wayne Reaves Computer Systems Inc. as a general informational overview only. It is not legal, tax, financial, insurance, or licensing advice, and it does not create any professional or advisory relationship. Licensing requirements are established and administered solely by the State of Texas and are subject to change without notice. Wayne Reaves Computer Systems Inc. makes no representation or warranty as to the accuracy, completeness, or currency of the information here, and accepts no liability for any action taken in reliance on it. Verify all requirements directly with the Texas Department of Motor Vehicles and consult qualified professionals before acting.
Reviewed July 2026. Reviewed quarterly.