What Is the Texas Auto Dealer Bond?
Think of the Texas auto dealer bond as a promise to your buyers and the state. Break a dealer rule, and they can claim against the bond. You then repay the surety.
The Texas bond is set at $25,000.
Who Needs This Bond in Texas?
- Retail dealers in Texas must post the bond to be licensed.
- Wholesale dealers are usually covered too.
- You renew the bond with your license.
How Much Will the Bond Cost?
Premiums on a $25,000 Texas dealer bond are credit-based. Approval is generally fast because the bond amount is modest and Texas dealer claims are relatively predictable.
| Credit Profile | Annual Premium | Approx. Rate |
|---|---|---|
| Excellent Credit | $175 – $250 | 0.7% – 1% |
| Good Credit | $250 – $375 | 1% – 1.5% |
| Fair Credit | $375 – $625 | 1.5% – 2.5% |
| Credit Challenges | $625 – $1,000 | 2.5% – 4% |
| Past Credit Issues | $1,000 – $1,250+ | 4% – 5%+ |
How to Get Bonded — Step by Step
- Get a quote on this page. Approval is quick for most dealers.
- Complete your dealer application.
- File the bond with the TxDMV Motor Vehicle Division.
- Get licensed and open for business.
Renewal & Continuous Bond Coverage
Texas dealer licenses renew every two years. Your bond must stay in force the whole time. Start before it expires so you do not lose your license.
Frequently Asked Questions
Does the Texas bond protect me?
No. The bond protects your customers and the state, not you. If a claim is paid, you repay the surety. It is not insurance for you.
How fast can I get bonded in Texas?
We shop several sureties for you, often within a day. Many bonds are issued the same day for good credit.
How much does the bond cost?
You pay a yearly premium — a small percent of the bond amount. Your rate depends mostly on your credit.
How a Surety Bond Works
A dealer bond is a type of surety bond. The picture below shows the three parties and what happens if someone files a claim.
Ready to get your Texas Auto Dealer Bond?
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Start Your ApplicationRelated: All Texas surety bonds · What is a surety bond? · How surety bond costs are calculated