Dealer Surety Bond in Texas: $25,000 Requirement
Texas requires all licensed dealers to maintain a $25,000 surety bond. Here is exactly what you need, what it costs, and what happens when a claim is filed.
Bond Requirement at a Glance
Minimum for independent dealers. Franchise dealers may require higher amounts tied to inventory floor-plan.
Who Needs a Surety Bond in Texas
Required for all licensed dealers, wholesale dealers, and vehicle storage facilities.
- Independent motor vehicle dealer
- Wholesale dealer
- Franchised dealer
- Motorcycle dealer
- Converter dealer
How to Get a Bond in Texas
Where to get it: Any surety company authorized to do business in Texas (Zurich, Travelers, AmTrust)
Bond form GDN-Bond must be TxDMV-approved. File via eLICENSING portal with bond attached.
Annual Premium Cost
$125–$375/year (0.5%–1.5% of bond face value)
Texas dealers with poor credit may pay 3%–5%, or $750–$1,250/year. Consider credit repair before applying.
How Claims Work
Injured buyer files with TxDMV or directly with surety. TxDMV investigation required before surety pays.
Texas has a separate Lemon Law fund; surety bonds cover fraud/title defects, not manufacturing defects.
Penalties for Operating Without a Bond
Texas-Specific Note
Frequently Asked Questions
How much is a dealer surety bond in Texas?
Texas requires a $25,000 surety bond for licensed dealers. Minimum for independent dealers. Franchise dealers may require higher amounts tied to inventory floor-plan.
Who requires a dealer surety bond in Texas?
Texas Department of Motor Vehicles (TxDMV) Motor Vehicle Division requires the bond. Required for all licensed dealers, wholesale dealers, and vehicle storage facilities.
How much does a dealer surety bond cost annually in Texas?
Expect to pay $125–$375/year (0.5%–1.5% of bond face value). Texas dealers with poor credit may pay 3%–5%, or $750–$1,250/year. Consider credit repair before applying.
What happens if a Texas dealer doesn't have a surety bond?
License denial or suspension. Operating without bond: Class B misdemeanor, up to 180 days jail.
How does a surety bond claim work in Texas?
Injured buyer files with TxDMV or directly with surety. TxDMV investigation required before surety pays. Texas has a separate Lemon Law fund; surety bonds cover fraud/title defects, not manufacturing defects.
Ready to Document Your Vehicle Sale?
Create a legally compliant Texas bill of sale in minutes.
Generate Bill of SaleSource: Texas Department of Motor Vehicles. Verify current bond amounts with your state DMV before purchasing.