Texas Motor Vehicle Dealer Bond

Texas Auto Dealer Bond

Independent car dealers in Texas need to have a $50,000 Motor Vehicle Dealer Surety Bond filed with the Texas Department of Motor Vehicles to receive their General Distinguishing Number (GDN). The bond is used to make sure that dealers of all kinds (independent, wholesale, or independent mobility) will complete payments as needed and have valid titles for the vehicles that are for sale. 

VIEW YOUR BOND PRICE

Buying your Car Dealer Bond with Jet is as easy as it gets. You’ll be able to buy your bond for either low monthly payments or in full for the whole license term quickly and efficiently.

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

You can pay as low as $19 a month or $375 for a 2-year term with Jet. Of course, the cost of a Car Dealer Bond is based on several factors like personal credit, bankruptcies, and how many years you have held a license, so prices may vary. Apply now to find what rate you are approved for instantly!

Bond TermCost
Monthly$19
2 Years$375
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, such as temporary tag abuse

Why Is the Auto Dealer Bond Required?

The motor vehicle dealer (MVD) industry as a whole has a reputation for engaging in some less-than-ideal business practices, so surety bonds are utilized as a safeguard 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, you are able to assure the people of Texas that you are a dealer with integrity and are compliant with the state regulations. 

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?

After your payment, Jet sends you a digital copy of your Motor Vehicle Dealer Bond. You may take that digital copy and upload it to the eLicensing portal; this helps get your license up and running or renewed but the original must still be filed. The original, physical copy of the bond will 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 cancelled early. If you need to cancel your bond, send an email to Jet at bonddept@jetsurety.com to begin the process. The TxDMV holds the bond for 35 days once a request to cancel is received to allow for another bond to replace it—a license without a bond will be suspended. Once the bond has been fully cancelled, 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, payments will continue during the 35-day period until the cancellation is finalized and you will no longer be charged.

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 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 MVD 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. An injured party can look for compensation if a car dealer fails to: 

For a claim to go through, the person who suffered damage from the dealer’s actions that are covered by the bond needs to obtain a judgment appraising the damages and attorney’s fees for the recovery of the judgment. More than one person can make a claim to recover from the bond, but the claims cannot draw upon the bond past the full limit. 

If you receive a claim, contact Jet right away! Our team will investigate whether the claim is valid. If it is, we will have to pay out the claim to reimburse the person who suffered monetary loss. Since your actions led to the claim, you are still liable for the damage and will be responsible for paying Jet back.

Are There Other Licenses That a Texas Independent Motor Vehicle Dealer Needs?

The TxDMV allows dealership owners to perform salvage work under their regular GDN license as of September 1, 2019. Prior to that, car dealers would have to be licensed as both a motor vehicle dealer and a salvage dealer. Dealers are still required to comply with rules and regulations that apply to salvage work. 

Texas Auto Dealer Bond Form

Notary Bond Application:

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:

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:

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: