Texas Auto Dealer Bond

Texas Auto Dealer Bond

Independent car dealers in Texas need a $50,000 Motor Vehicle Dealer Bond filed with the Texas Department of Motor Vehicles to receive their General Distinguishing Number (GDN). The bond is used to provide financial protection for consumers should businesses (including independent motor vehicle, motorcycle, wholesale, and independent mobility dealers) fail to abide by licensing requirements, such as transferring a clean title.



Jet studies the car business to sniff out the shady shops that cause all of the claims, allowing us to lower bond prices for Texas dealers.

Other bond providers just run a generic credit check, which opens the floodgates causing quality dealers to unfairly subsidize the deadbeats with an inflated premium.

We think honest dealers with solid business practices should get to save on their bond.

Claim your honest dealer savings by completing the above application.

What Is the Lowest Price for the Texas Auto Dealer Bond?

You can pay as low as $12 a month or $219 for a 2-year term bond with Jet. That is the lowest price of any surety carrier. The cost of a Car Dealer Bond is based on several factors like personal credit and experience, so prices may vary. Apply now to find what rate you are approved for in a couple of minutes.

Bond TermCost
Monthly$12
2 Years$219
Texas Auto Dealer Bond Rates

As of September 1st, 2021, the limit for a bond held by an independent motor vehicle dealer increased from $25,000 to $50,000 under Texas House Bill 3533. This change is to provide appropriate coverage for the harmful actions of a car dealer per the State—such as temporary tag abuse—but increased the cost of the surety bond for Texas dealerships.

Why Is the Auto Dealer Bond Required?

The motor vehicle dealer industry as a whole has a reputation for engaging in some less-than-ideal business practices, so surety bonds are utilized as a safeguard for consumers throughout the country. 

In Texas, the Department of Motor Vehicles (TxDMV) uses the Auto Dealer Bond to ensure that financial loss to consumers due to fraudulent or negligent car dealer actions does not go without penalization. By having a General Distinguishing Number and active bond, the Texas State Legislature believes it can assure the people of Texas that you are a dealer, are accountable, and will be compliant with the state regulations. 

Certain license types regulated by the TxDMV need a security requirement in the form of a surety bond and others do not.

Surety Bond Required

No Surety Bond Required

How to Apply for the Texas Auto Dealer Bond With Jet

Click the button above to apply now! Jet has simplified the application process to make sure that only the absolutely necessary information is requested. This means basic business information and your social security number for the soft credit check. 

Once you have completed the application, you will find your approved rate that is ready for purchase or your application will be sent to a Jet underwriter for a quick review. Once a rate is ready, you’ll be sent an email with both monthly and pay-in-full options. When payment is received by Jet, we will prepare your bond form and send you a digital copy and receipt via email.

How Does the Auto Dealer Bond Get Filed to the Department of Motor Vehicles?

Click the button above to apply now! Jet has simplified the application process to make sure that only the absolutely necessary information is requested. This means basic business information and your social security number for the soft credit check. Don’t worry, this will not affect your credit.

Once you have completed the application, you will get an approved rate that is ready for purchase. Submit payment and a moment later you will receive a bond copy and receipt. A completed bond will be emailed to you for your countersignature to be uploaded by you to the Texas DMV eLicensing Portal under your login credentials.  

The physical copy of the bond can be mailed to you so you can file it with the TxDMV at the address below: 

Texas Department of Motor Vehicles
Motor Vehicle Division
PO Box 26487
Austin, TX 78755

Can I Cancel My Auto Dealer Bond and Get a Refund?

Yes; a refund may be available for a Motor Vehicle Dealer Bond that was fully paid for and needs to be canceled prior to the term’s expiration. Send an email to Jet at [email protected] to begin the process. The TxDMV holds the bond active for 35 days once they receive a request to cancel. Once the bond has been canceled, Jet will calculate the remaining time left in the term and refund you for any unused portion. 

If you are paying for the bond on a monthly basis, just let us know you want to stop the payments and we will cancel the bond.

Does the Motor Vehicle Dealer Surety Bond Expire?

The Texas Auto Dealer Bond has a specific term that coincides with the General Distinguishing Number License. The term is 24 months long—starting on the first day of the month of issuance and ending on the last day of the 24th month. 

To make it more clear, here’s an example: if your GDN license is issued in June, your license and bond effective date would be June 1st, 2020 and the expiration date would be May 31st, 2022. 

If you are renewing your license, you must also renew your surety bond. Jet will send you a renewal notice near the end of your term through the mail or email. It only takes a minute to choose how you want to pay (monthly or for the full term) and submit payment.

What Are Bond Claims and How Does an Auto Dealer Avoid Them?

Motor vehicle dealers have an obligation to follow Section 503 of the Texas Transportation Code for their licensing, but only certain actions are specifically covered by the Auto Dealer Bond. Some specific examples include injured parties looking for compensation if a car dealer fails to: 

For a claim to go through, the person who suffered damage from the dealer’s actions needs to obtain a judgment from a court first. Legal costs and attorney’s fees may be included in the recovery amount. 

Claims against the bond cannot exceed the bond limit. Multiple claimants can make a claim on a bond, but once again the surety cannot pay more than the $50,000 limit, even if there are multiple claims exceeding the limit.

If you receive a claim, contact Jet right away. It is in your best interest to assist us in preventing a claim payout and any evidence you can provide will help. However, if the court's ruling is warranted Jet will make recompense to the damaged party should the dealer fail to. 

That is a key point, Jet only makes payment if the dealer cannot or will not and that will affect the ability to maintain a license. If the surety company makes a payment, then the bond is no longer up to the limit needed. The dealer must pay the surety back to make it whole. Surety bonds are like lines of credit, not insurance.

Texas Auto Dealer Bond Form

Notary Bond Application:

X

Business Information:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Employee Dishonesty Bond Application:

Business Information:

Business Description:

Coverage Requirements:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Contract Bond Application:

X

Business Information:

Owner Information:

Job Details:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Worker's Compensation Application:

X

Business Information:

Business Description:

Coverage Requirements

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information: