As a matter of fact, Texas is an excellent state to get your business going. Auto Industry is on the boom, And the time to start an auto dealer business is just perfect. If you want to learn how to get a dealer’s license in texas, This article will help you in a great deal.
Here’s What Industry Insiders Say About How To Get A Dealer’s License In Texas.
Beforehand you start your own auto dealer’s business and acquire a dealer’s license in Texas, You need to know the seen and unseen of the industry. To establish any business in the U.S you required to comply with state laws, This is no exception in the case of texas. The process of starting a car dealership is very straightforward, First, you need to acquire a Texas auto dealer license, and also get a surety bond, Which is also known as an auto dealer bond.
1) Types of Licenses
Before you get a dealer’s license in Texas, You need to know which type of licensees you are looking for. There are many licenses in place for different dealers, For buying, selling, exchanging for New and For Old. Once you decided which license you want. Here is a list of all the licenses available in the state of Texas.
Apart, From license, you also need to acquire GDN or a general distinguishing number, From the TxDMV. You can also be part of the franchisee if you are looking to sell new cars. You can visit the Texas department for motor vehicles websites to get a list of documents needs to obtain those licenses.
2) Documents & Fees
All the licensing in the state of Texas is being processed through their e-platform. The licensing platform is managed by the DMV. A good strategy to get the license in your first go is to provide, authentic, and correct details in the form. Also, Make sure contact details are correct in case of communication with TxDMV. There are few documents that are essential in most cases these include, Proof of your business location (Agreement of Rent/Purchase). The document should mention the space of the property, You need at least big enough property to accommodate 5 five cars. Agreement Deed of Incorporation certificate. You also need to obtain EIN from the IRS. You also need to pay $700 and taxes for your GDN licenses.
3) Surety Bonds
An essential rule to acquire a dealer’s license in texas is to pay a sum of $25,000. This is known as the Texas auto dealer bond. If you are starting your business as a franchise then you are exempt from this rule. Also if you are taking a travel trailer license then too you are exempt from the rule. An auto dealer bond happens between three parties you as a business, the state, and the one providing the surety. The reason for the creation of a bond is to oblige you into following all the contracts that you adhere to. You can think of it as a safety for the common people, That you won’t break any law.
4) Save Money On Surety Bond
Now that it’s inevitable that you must pay the surety bond. Your next step would be to identify how could you reduce the following amount. You can save a good amount when you get a surety bond for acquiring the dealer’s license in texas. When you set up a bond, You are not expected to pay all the amount. You only have to pay a portion of it, Which comes around $250. What you are paying is also called a bond premium. To reduce your premium, You should have a good credit score and personal assets history. The better the stats, The less rate of premium you’ll pay. Generally, people pay around 1% to 3% of their actual bond amount. To increase your credit score you can learn or visit a credit repair business.
5) Applying for the dealer’s license
After you have thoroughly gone through all the required document lists, And have also looked for a good surety bond with a reputation that can be trusted. Now is this time, To push forward your journey to acquire a dealer’s license in texas. Create two copies of all the documents, and surety bonds, One for the state and the other for your reference in the future.
Your license will be valid for about two-years, And you need to pay fees for your license and for processing the documents. Once, Your payment is confirmed. They will go through with your documents and they’ll notify you about different stages through email. They might also contact you through time to acquire new documents.
Once, All the process is done you’ll receive your dealer’s license through the mail. You can also correct the mail address; If you have a problem with it in the form before your license is dispatch. Getting a dealer’s license is getting easy over time and if you follow all the steps, You’ll get your license in no time.