Independent car dealers in Texas need to have 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, or independent mobility dealerships, fail to abide with licensing requirements, such as transferring a clean title.
Buying your Auto Dealer Bond with Jet is as easy as clicking the button above, entering basic information and selecting your bond term. You can either choose a low monthly payment or pay for the 2 year bond term at a discounted rate.
You can pay as low as $14 a month or $263 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.
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.
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 they can assure the people of Texas that you are a dealer, are accountable and 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
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.
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
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.
The Texas Auto Dealer Bond has a specific term that coincides with the General Distinguishing Number License. The term is 24 months long and must start on the first day of the month of issuance and end 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.
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 $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.