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How to Become an Automobile Broker in Texas

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According to the 2010 census data, Texas boasts a strong economic growth over the national average. According to preliminary data from the U.S. Bureau of Labor Statistics, Texas is the only top ten state that has more jobs today than when the recession began in 2006. This, coupled with its rapidly growing metropolitan areas and business friendly tax structure, makes it a promising location for your new auto brokerage business.

Choose a business name and file a DBA (Doing Business As) with the county clerk’s office. Scan the clerk’s database to make sure that the name is not already in use. Take the form to your local bank to be notarized for free. If your bank does not offer this service, you can pay the clerk’s office an additional fee to do it. Most offices charge $3.00. Bring cash or a money order with you to the clerk’s office for the filing fee, as most offices will not accept personal check. The standard fee for filing a DBA in most Texas counties is $14.00.

Choose a location for your business and sign a lease. The original lease and pictures will be required when applying for your GDN (General Distinguishing Number), which you must have to broker automobiles.

Register online at the Texas Comptroller’s website for a Texas Sales & Use Tax Permit. Without this you will not be able to purchase cars wholesale or collect and pay tax on sales. Registration is instant and a permit will be sent to you by mail.

Contact a bonding company to get bonded for no less than two years. All car dealers are required by the state to be bonded. Refer to the TxDMV requirements online to ensure compliance when structuring your bond. These requirements are very specific and, if not followed, will result in denial or delay of your GDN application.

Apply to TxDMV (Texas Department of Motor Vehicles) for a GDN (General Distinguishing Number). Be sure to indicate the correct category (Motor Vehicle) under line 7. The application fee of $700.00 can be paid by credit card, check or money order.


Read over the GDN application carefully before starting this process to clarify the state’s requirements. Before submitting your GDN application, make photocopies of every document for your records. Mail the application via certified mail and file the receipt with your copies.


Consult a certified public accountant to ensure that taxes are paid properly and on time. Failure to file and pay taxes can result in fines, penalties and closure. Contact the SBA (Small Business Administration) for help in planning and structuring your business.


Beth McKenna has been writing professionally since 2004. Her work has appeared in a variety of publications and Web sites, including eHow. She is a small-business owner based in Houston. McKenna studied journalism at Lee University and real estate finance at Middle Tennessee State University.