Surety Bond Education

Motor Vehicle Dealer Bond

Who Needs a Motor Vehicle Dealer Bond?

In the state of Texas, anyone applying for a motor vehicle dealer license will first need to obtain a motor vehicle dealer bond.  If you are engaged in the business of buying or selling vehicles as a dealer you will need this bond. In the State of Texas, the amount of the bond is $25,000.  But the bond amount varies by state.

What Does This Bond Guarantee?

A Motor Vehicle Dealer Bond guarantees that you, as the dealer, will provide valid payment to anyone from whom you buy a vehicle. It also guarantees that any vehicle that you sell will have clear title. If you fail to do either of these things then the individual that you harmed in the process may be able to file a claim on your bond. If the surety company subsequently pays out on the claim they will look to you to indemnify them.  Or, in other words, they will look to you to reimburse them for any funds they paid out on your behalf.

How Do I Obtain This Bond?

First, in order to obtain a Motor Vehicle Dealer bond in Texas we need the following:

  1. An application that is complete and signed both by the owner(s) of the dealership and the dealership
  2. Clean personal credit report
  3. Payment of the bond premium

How Much Does This Bond Cost?

The premium of this bond varies but it generally depends on your time in business and your personal credit score.  The better your personal credit score, the lower the premium.  In the State of Texas, the bond is a 2 year bond.  And the premium you pay covers a two year period.  The premium could be as low as 1% of the bond amount per year (or $550) if you have good personal credit.  Or the premium could be 3% of the bond amount per year or higher if your personal credit is not so good.

What’s Next?

The best place to start is by completing our online application. Once we find the right surety company to suit your situation you will need to sign an application.  And once we receive payment we can usually have your bond prepared the same day. We can accept credit card payments over our secure website for your convenience.


Obtaining a surety bond for the first time can be confusing.  We are here to help make the process as easy as possible. Please call us at 512-640-6444 or email Eric with any questions you may have. We are happy to help in any way we can!

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