Converter License

converter
  • A "conversion" means a motor vehicle, other than a motor home, ambulance, or fire-fighting vehicle, that:
    1. has been substantially modified by a person other than the manufacturer or distributor of the chassis of the motor vehicle; and
    2. has not been the subject of a retail sale.
  • A "converter" means a person who before the retail sale of a motor vehicle:
    1. assembles, installs, or affixes a body, cab, or special equipment to a chassis; or
    2. substantially adds, subtracts from, or modifies a previously assembled or manufactured motor vehicle other than a motor home, ambulance, or fire-fighting vehicle.
  • A "retail sale" is defined as any sale of a motor vehicle other than:
    1. a sale in which the purchaser acquires a vehicle for resale; or
    2. a sale of a vehicle that is operated under and in accordance with Section 503.061 of the Texas Transportation Code, which allows for the use of metal dealer's license plates.
  • Neither converters nor their representatives are allowed to sell the new motor vehicles they convert directly to Texas consumers, including municipalities. Only dealers that are franchised and licensed for the underlying line-make of the converted vehicle are allowed to sell converted vehicles to Texas consumers. If a converted new motor vehicle is sold through a bid process, a franchised dealer for the underlying chassis line-make must be listed on the bid as the seller.
  • The initial sale of the new motor vehicle to a converter is not a retail sale, since the converter purchased the vehicle in order to convert it and then resell it. Thus, even though the converter may title the vehicle in their name, it is still a new motor vehicle.
  • The converter is not required to purchase the motor vehicle it will convert from a Texas franchised dealer. However, once the conversion is complete, the vehicle can only be sold to the end-user by a franchised and licensed Texas motor vehicle dealer for the underlying chassis line-make. The franchised dealer must invoice the end-user for the entire purchase price of the vehicle, including the conversion package, obtain payment for the entire purchase price, and perform the titling work on the complete vehicle. How the converter is paid for the conversion package and conversion work is between the converter and the franchised dealer.
  • Substantial modifications performed on vehicles that have already been the subject of a retail sale are considered “after-marketconversions, and are not subject to regulation by Texas Department of Motor Vehicles.
  • If a person makes substantial modifications to a new motor vehicle and the resulting product is an ambulance, fire-fighting vehicle, or motorhome, as those terms are defined in Chapter 2301 of the Texas Occupations Code, then the person must obtain a manufacturer license, not a converter license. However, if even one of the conversions produced does not meet the exact definition of ambulance, fire-fighting vehicle, or motorhome, then a converter license, as well as a manufacturer license, is required.
  • Converters are not required to be physically located in Texas. Even if the converter is located in another state, as long as new motor vehicles they convert are sold in Texas, the converter must have a converter license issued by Texas Department of Motor Vehicles.

Franchise License

franchise
  • You need both a Franchise License and a General Distinguishing Number (GDN or P-number) to buy, sell, service, or exchange new motor vehicles, motorcycles, or towable RVs (including travel trailers, but not including utility trailers/semitrailers).
  • Franchised dealers operate under agreements with manufacturers or distributors to sell new vehicles.
  • A franchise dealer license is issued to a specific person or business entity for a specific showroom (location). This license is not transferrable to another person or another business entity.
  • A separate franchise license is required for each separate showroom.
  • Multiple vehicle line-makes may be sold in the same showroom, so long as each line-make is listed on the franchise license.
  • You may operate multiple franchise showrooms (new vehicle sales) within the same city limits with a single GDN. However, each franchise showroom location is licensed separately. The dealer may use one GDN license number for all subsequent applications.
  • Service-only Facilities:
    • A service-only facility is a location occupied and operated by a franchised dealer that is a completely separate, non-contiguous site, from the franchised dealer's new vehicle sales and service or sales only location, where the franchised dealer will perform warranty and non-warranty repair services.
    • TxDMV does not license a facility that performs only non-warranty repairs.
    • Sales of vehicles do not occur at a service-only facility.
    • The facility requires a separate, service-only franchise license. The fee is $200.
    • The dealer may not obtain a service-only facility license to service a particular line-make of new motor vehicles, unless the dealer is also franchised and licensed to sell that line-make.
  • Leasing Vehicles:
    • In general, dealers may not use the word “lease,” “leasing,” or any variation in their DBA unless they have a lessor or lease facilitator license.
    • The exception to this is a franchised dealer, who may lease a motor vehicle owned by the dealer and of a line-make the dealer is licensed to sell.
  • Dealerships (except trailer dealers) may be open Saturday or Sunday, but not both.

LF 621 - Evidence of Relocation

LF 131AB - Evidence of Franchise

In-Transit License

transitAn in-transit license is required for a drive-a-way operator who transports and delivers a vehicle in this state from the manufacturer or another point of origin to a location in this state using the vehicle's own power or using the full-mount method, the saddle-mount method, the tow-bar method, or a combination of those methods.

Drive-a-way operators may apply for, receive, and attach metal in-transit license plates to the vehicles they transport.

Independent (GDN) License

independentA GDN is the basic dealer license that allows a person to buy, sell or exchange the type of used vehicle for which the GDN is issued. GDN licenses are divided into several categories. When applying for license, you must select one of the independent license types on the application. If you wish to have multiple types, you may submit multiple applications.

 

Independent Motor Vehicle - May buy, sell, or exchange any type of used cars, trucks, motor homes, and neighborhood vehicles. May use dealer's temporary tags, buyer's temporary tags, and metal dealer license plates on motor vehicles only. Must provide a bond.

Independent Motorcycle - May buy, sell, or exchange any type of used motorcycles, motor scooters or ATVs. May use dealer's temporary tags, buyer's temporary tags, and metal dealer license plates on motorcycles, motor scooters or ATVs only. Must provide a bond.

Travel Trailer - May buy, sell, or exchange used travel trailers. May use dealer's temporary tags, buyer's temporary tags, and metal dealer license plates on travel trailers only. Exempt from the security requirement.

Trailer/Semitrailer - May buy, sell, or exchange new or used utility trailers and/or semitrailers. May use dealer's temporary tags, buyer's temporary tags, and metal dealer license plates on trailers/semitrailers only. Exempt from the security requirement.

Wholesale Dealers - sell or exchange vehicles only with other licensed dealers. Are NOT required to have a five-vehicle display area. May NOT sell vehicles to retail purchasers. Wholesale vehicle dealers may buy, sell, or exchange used vehicles, including motor vehicles, motorcycles, and travel trailers. May buy, sell, or exchange new or used trailers and/or semitrailers. May use temporary tags and metal dealer license plates. Must provide a bond.

Wholesale Motor Vehicle Auction - May offer vehicles for sale by bid only to licensed dealers at a bona fide auction at a permanent location. Must provide a bond. May not make facilities or GDN available to any other person for the purpose of the sale or auction of vehicles. May be issued only one wholesale motor vehicle auction GDN for a particular location. May be issued a regular motor vehicle GDN for a location that has been issued a wholesale motor vehicle auction GDN.

Independent Mobility Motor Vehicle Dealer License - allows a dealer to offer to sell new mobility motor vehicles. A "mobility motor vehicle" is a motor vehicle designed and equipped to transport a person with a disability.

LP011 Notice to Applicants Concerning License Purveyors

Leasing License

leasingA motor vehicle lease allows an entity to possess and use a motor vehicle in return for consideration and without changing ownership of the vehicle. The lessor is the actual title holder of the vehicle. A lease facilitator may act as a facilitator of the agreement. In Texas, lessors and lease facilitators are required to be licensed.

Lease Facilitator

The lease facilitator license allows a person to hold himself or herself out to be a leasing agent or leasing company. This person solicits someone to enter a contract of agreement to lease a vehicle. A lease facilitator by definition, is not the lessor or owner of a vehicle, but rather someone who puts the lessor, selling dealer and lessee (buyer) together.

Lessor License

The lessor license is required of a person who, under the terms of a lease agreement in excess of 180 days, gives another person the right to possess and use a motor vehicle that is titled in the name of the lessor.

A lessor licensee does not need to have a lease facilitator license to facilitate leases for themselves. The lessor license includes the ability to facilitate its own leases. However, if the lessor facilitates leases between lessees and other lessors, they would need a lease facilitator license in addition to their lessor license.

Note: Franchise dealers do not have to apply for a separate leasing license to be able to lease the vehicles they are licensed to sell.

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