Future Dealers


Thinking of becoming an independent dealer in Texas? You came to the right place! Our prep course, “How To Become An Independent Auto Dealer,” was specifically designed with you in mind.

Future Dealer Questions:

Do I need a license?

If you are at all serious about the business, then YES. An individual is allowed to sell up to four vehicles per year without a dealer’s license – kind of tough to make any money that way, huh? Plus, every one of those vehicles has to be titled in YOUR name before you sell it. Why does that matter? Because that means you will be paying 6.25% in sales tax on each vehicle you buy – BEFORE you sell it! Licensed dealers do NOT pay sales tax on vehicles they acquire for their inventory.

So, what do I need to get my license?

On the most basic level, you’ll need a physical location for your dealership that meets the state’s premises requirements, and a dealer surety bond in the amount of $25,000. Dealer licenses are $700 + dealer plates and are issued for two year terms.
Application materials are available in this area of the TxDMV website.

There’s got to be more to it than that, right?

Oh yes, most definitely. A LOT more. That’s why we built the course, “How To Become An Independent Auto Dealer.”

I heard I could just sell under another dealer’s license instead of getting my own...true?

Well, you could...however, it is illegal, and could result in civil proceedings being brought against you by TxDMV, the OCCC or both. Maybe worse, either agency could then oppose you ever getting your legitimate license. So DON’T DO IT.

I just want to sell cars online, I don’t want to mess with getting a location or license...how can I do that?

You can’t. Under Texas law, you are required to have a licensed location to sell vehicles. If you don’t, law enforcement can (and will) seize your vehicles, impound them and not release them without proof of ownership in YOUR name on the front of the title. So get your license, join TIADA and get on the good guys’ team!

Who do I use for insurance, dealership management software, service contracts, floorplanning...and everything else?

Great questions. TIADA does not endorse any specific providers, but we'd recommend you check the Membership Directory in each category to see what companies are TIADA members. You should also have a look at our Business Partners.

Can I be a TIADA member?

Sure! But the association is for licensed dealers only. Once you get your P number, we will be glad to have you as a member.