Texas Motor Vehicle Dealer Bond
Overview
Texas ties the dealer bond directly to your General Distinguishing Number: under Texas Transportation Code section 503.033, the TxDMV may not issue or renew a motor vehicle dealer GDN or a wholesale motor vehicle auction GDN unless the applicant proves it has purchased a properly executed $50,000 surety bond from a surety approved by the department. One important carve-out comes straight from the statute — section 503.033(i) says the requirement does not apply to a person licensed as a franchised motor vehicle dealer. So this bond is the gatekeeper for independent dealers and wholesale auction operators, not franchise stores.
Who Needs This Bond?
Applicants for a Texas motor vehicle dealer General Distinguishing Number (GDN) — independent used-vehicle dealers and wholesale motor vehicle auction operators — must file this bond to get or renew the GDN, per Transportation Code section 503.033(a). Franchised motor vehicle dealers are expressly exempt under section 503.033(i). If you're opening an independent lot, going wholesale, or running a dealer auction in Texas, the TxDMV will require this bond before your GDN is issued.
What is this Bond For?
The statute is unusually specific about what this bond guarantees. Under section 503.033(b), the bond must be in a form approved by the Texas Attorney General and is conditioned on two things: that the dealer pays all valid bank drafts (including checks) drawn to buy motor vehicles, and that the dealer transfers good title to each motor vehicle it offers for sale. Section 503.033(d) lets a harmed person recover against the bond after obtaining a judgment for damages and reasonable attorney's fees based on those conditions, and sections 503.033(e) and (f) cap the surety's total liability at the face value of the bond no matter how many claims are made.
When is it Required?
The bond is required at both issuance and every renewal of the GDN — the TxDMV 'may not issue or renew' the number without satisfactory proof of the executed bond, per section 503.033(a). Recovery under section 503.033(d) reaches acts or omissions that occurred during the term for which the GDN was valid, so the bond needs to be in force for the full life of the license. Line up the bond before you submit your GDN application so licensing isn't held up waiting on it.
Where Does it Apply?
This is a statewide Texas requirement enforced by the Texas Department of Motor Vehicles, because the obligation comes from the Transportation Code rather than any city or county rule. Section 503.033(g) even requires dealers to post notice of the surety bond — adjacent to and in the same manner as the posted GDN — describing how a claimant may recover against it, and section 503.033(h) directs the TxDMV to publish the claim-recovery procedure on its website.
How to Buy Online
Click 'Buy This Bond Online' on this page to open the secure surety portal in a new tab. Complete the short application, review your bond documents, and pay securely in a single session. Your properly executed Texas GDN bond is ready to submit with your TxDMV dealer license application as soon as you finish.
Why Bond Titan?
Bond Titan is powered by The Southern Agency, a licensed surety agency, and the requirements described here are cited to the exact subsections of Texas Transportation Code section 503.033 in the Official Sources list below — verify every claim yourself before you buy. The fully online flow is built so independent dealers can get bonded and get their GDN paperwork moving the same day.
Official Sources
The requirements described on this page are verified against the official sources below.
- $50,000 bond required for GDN issuance/renewal; title and bank-draft conditions; judgment recovery; liability caps; posting requirement; franchised-dealer exemption: Texas Transportation Code §503.033 (verified July 16, 2026)