How to Obtain a Car Auction License in Texas (Updated 2024)

As most people interested in car auctions, you probably want to know how to obtain a car auction license in Texas.

This guide will walk you through a step-by-step process, ensuring you have all the information needed to successfully acquire your license.

We will explore everything from the basic requirements to the application process and best practices to ensure you are fully prepared.

Types of Licenses

Types of Licenses Needed for Car Auctions

  • Independent Dealer License: Required for buying and selling cars.
  • Franchise Dealer License: Needed for selling new vehicles.
  • Wholesale Dealer License: Lowers overhead costs by operating without a physical lot.

Ensure you apply for the correct license type based on your business model.

Basic Requirements

Basic Requirements for Obtaining a Car Auction License in Texas

  • Must be at least 18 years old.
  • Valid driver’s license.
  • Business location in Texas.
  • Criminal background check.

Have all necessary documents ready before starting the application process.

Application Process

Step-by-Step Application Process

  1. Complete the Application: Obtain and fill out the application form from the Texas Department of Motor Vehicles (TxDMV).
  2. Submit Fingerprints: For a background check.
  3. Proof of Insurance: Provide liability insurance documentation.
  4. Pay Fees: Pay the required application fee.

Costs and Fees

Costs Involved in Obtaining a License

  • Application fee: $700
  • Fingerprint processing fee: $38.25
  • Surety bond: $25,000

Educational Requirements

Training and Educational Requirements

  • Pre-License Training: 6 hours of online training approved by the TxDMV.
  • Renewal Training: 3 hours of online training.

Business Registration

Registering Your Business

  • Select Structure: Choose your business structure (LLC, corporation, etc.).
  • Business Address: Must meet TxDMV specifications.
  • Permanent Signage: Display business name prominently.

Ensure your business address meets all regulatory requirements.

Texas Auto Dealer Bond

Obtaining a Texas Auto Dealer Bond

  • Required for operating in Texas.
  • Provides public assurance for transactions.
  • Costs vary based on credit score, typically between 1-3% of the bond amount.

Maintaining Your License

Maintaining Compliance

  • Renew annually.
  • Continue adhering to all state regulations.
  • Complete any required continuing education.

Timely renewal is crucial to keep your license active.

How to Obtain a Car Auction License in Texas

Step-by-Step Guide to Get a Texas Car Auction License

Step 1: Select the Right License Application
You can select and submit more than one application if you plan to operate under multiple licenses at the same time. Only certain licenses require a surety bond to fulfill the application requirements.

Step 2: Register Your Business with the Secretary of State
Decide whether to operate as a partnership, a limited liability corporation, a sole proprietorship, a corporation, or a workers’ cooperative enterprise. You must register the business with the Secretary of State. Registration can be done on the website.

To meet the permanent business requirement of the DMV, you must obtain a business address that meets the following specifications:

  • The building must have connecting exterior walls on every side.
  • The building must be located within a commercial zone.
  • You must provide a valid business mailing address and phone number.
  • The building must comply with zoning laws, deed restrictions, and regulations.
  • The business office must contain at least one desk, two chairs, a phone, and internet access.
  • You must have a permanent business sign featuring the business name in legible letters. It must be at least 6 inches high.
  • Display areas must be well-lit and accommodate at least five vehicles.
  • Business hours must be displayed at the building’s main entrance.
  • A lease agreement or proof of ownership must be obtained in writing.
  • Phone lines must be answered by a service or employee from the hours of 8:00 a.m. to 5:00 p.m. during weekdays.

Step 3: Obtain a Texas Auto Dealer Bond
A Texas auto dealer bond is required for operating in the state. The surety bond provides the public with the necessary assurance to conduct transactions with confidence. Only a small percentage of the surety bond cost amount must be paid up front.

How Much Does It Cost to Get an Auction License in Texas?
The total cost of obtaining an auction license depends on the amount you will pay for your business address, license, and surety bond. These are the major expenses, yet they depend on several variables.

  • Required training costs no more than $150.
  • To submit a complete application, you must provide a business address. The cost of this property will depend on the business owner’s acumen in securing a good deal.
  • The assumed name certificate shows up on your business license; this determines the fee applied.
  • The surety bond price is determined by your credit score. The total bond amount must be at least $25,000; the credit score will determine the percentage. It is usually around 1 to 3% of the total. The online quotes for a surety bond will be higher if the credit score is low and can go as high as 15%. A good credit score results in a price range between $500 and $2,500.

Comparison of Costs and Requirements

StateApplication FeeRequired Documents
Texas$700Proof of business, insurance
California$600Proof of business, bond
New York$750Background check, insurance
Florida$500Surety bond, business license
Illinois$550Fingerprints, proof of business
How to Obtain a Car Auction License in Texas

FAQ: How to Obtain a Car Auction License in Texas

What is required to start the process of obtaining the license?

Minimum age of 18, valid driver’s license, proof of business location, and a criminal background check.

How long does it take to get the license?

Several weeks, depending on the completeness of your application.

Can I conduct online car auctions with this license?

Yes, you can conduct both physical and online auctions.

What are the penalties for non-compliance?

Penalties include fines, suspension, or revocation of the license.

Is the license valid in other states?

No, it’s only valid in Texas. Each state has its own requirements.

How do I renew my license?

Renew annually through the TxDMV, submitting a renewal application and fee.

Is training required to obtain the license?

Yes, 6 hours of pre-license training and 3 hours for renewals.


Obtaining a car auction license in Texas requires meeting several requirements, following a detailed application process, and adhering to various regulations.

By following this comprehensive guide, you can successfully navigate the process and begin your car auction business.

To deepen your understanding and ensure you have access to authoritative sources, here are some valuable external links:

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I'm Vinicius Balbino, passionate about writing and researching fascinating subjects. With a curious and restless mind, I constantly seek to explore new ideas and uncover inspiring insights.