How to Get a Car Broker License in Texas

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Car brokers generally buy and sell motor vehicles for third-party clients. Under Texas law, any person who engages in the business of buying, selling or exchanging motor vehicles must obtain a General Distinguishing Number (GDN) license from the Texas Department of Motor Vehicles. Though some car brokers do not maintain their own vehicle inventories, GDN licensure requires that you secure the facilities for display of an inventory. Thus, once you are licensed, you will be able to operate as a general dealer if you so choose. Before submitting an application, you must secure an appropriate location, register your business with the appropriate authorities and obtain sufficient bonding.

  • Visit the Texas Department of Motor Vehicles website and download a General Distinguishing Number application packet (see Resources). Read through the documents to familiarize yourself with the licensing procedures and requirements.

  • Find an appropriate location for your business. Before putting your name to a lease or purchase agreement, confirm that the location is appropriately zoned and meets all Department of Motor Vehicles requirements. First, pay a visit to your local zoning regulations office. Verify that the location is properly zoned for the operation of an auto brokerage. Second, verify that the location has a permanent office and sufficient space to display at least five cars.

  • Choose a name for your car brokerage. Visit your county clerk's office and file an assumed name certificate if your business name does not include your given legal name. Retain copies of your certificate for inclusion with your application.

  • Prepare your location according to Department of Motor Vehicle standards. Install a permanent sign to display your business name. The sign must be viewable from the streets around your property. Install a land-line telephone listed under your business name and hook up a fax machine and an answering machine. Take photographs of your property, including the sign, office and display area. Your application contains detailed photography instructions. You must include the photos with your application.

  • Measure the square footage of your office and display area. Include this information in your application.

  • Obtain a personal financial statement showing your assets and liabilities. Include this with your application.

  • Obtain a Federal Employer Identification Number (EIN) from the Internal Revenue Service. Visit the IRS website to do this online.

  • Obtain a two-year, $25,000 surety bond. Surety companies across the state can sell you an appropriate bond. Include the original, signed and dated bond with your application.

  • Complete the application and have it notarized. Submit it, along with supporting documentation and required fees, to the indicated address. When your application has been approved, a license will be sent to you.

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