House Grail is reader-supported. When you buy via links on our site, we may earn an affiliate commission at no cost to you. Learn more.

How Many Cars Can You Sell In A Year In Texas?

salesman giving car keys to buyer

It is perfectly legal to sell your own car or vehicle, regardless of whether you make a profit on the sale, as long as it was registered in your name before the sale. In fact, you can sell up to four vehicles a year, in this way. But, if you plan to trade five or more vehicles, in Texas, you require a dealer license which usually means that you need an office and parking space for your vehicles. Other requirements may also apply and there is a fee, but having a dealer license means that you pay less tax when buying vehicles so it may work out profitable.

divider 1 Selling Your Personal Vehicle

Every state allows you to sell your personal vehicle, regardless of whether it sells for a profit or at a loss. The vehicle you sell must be titled in your name and it must have been used for your personal or business uses before it is sold.

Because some people change cars regularly, the state of Texas allows you to do this four times a year, which means that you can sell four vehicles a year before you have to worry about getting a license. However, all of those vehicles must have been titled in your name and used by you before their sale.

Although every state allows the sale of personal vehicles, different states have different regulations regarding the number of vehicles you can sell in a year, as well as different dealer license requirements.

old man handing over car keys to a young man
Image Credit: Freepik

Title Jumping

If you fail to title a vehicle in your name and resell it for profit, you are breaking laws and it is known as title jumping. Failure to register a car within 30 days of buying it can lead to a nominal fine of $25. The fine increases by $25 for every additional month you fail to register. There are no waivers for this fine, either, which means that neither the state of Texas nor the DMV can reduce or waive the fine.

How Much Is A Dealer License In Texas?

If you do intend to flip vehicles for profit, you need a dealer license. The license costs $700 and you will also need to pay $90 for each dealer plate required. The license is issued for two years and renewal costs $400, although these fees may change over time. You must also get a $50,000 surety bond and be able to show proof of this during your application.

car dealer
Image Credit: andreas160578, Pixabay

The Benefits Of Having A Dealer License

With a dealer license, you do not pay the same 6.25% tax when purchasing a car. You can also enjoy tax-free purchases of car parts, gas, and other acquisitions. You will be able to gain access to dealer auctions where you will be able to buy individual or multiple vehicles at reduced costs. You can then buy your pick of the lot at a trade price for your own use, and you can offer similar financially beneficial deals to family and friends.

How Do I Get A Dealer’s License In Texas Without A Lot?

In order to obtain a retail dealer license in Texas, you need to have a suitable property that meets zoning requirements. The building must be enclosed and have a desk, two chairs, and a phone, and it must have Internet access. It should also have a sign that is visible to the public and that includes your dealership name. To be a retailer dealer, which means selling cars to members of the public, you also need to have a lot with space to display five vehicles.

Wholesale dealers, who are not licensed to sell to members of the public and must sell to other licensed dealers, do not need space to display vehicles, although you will still need office space in a building that is appropriately zoned and it must contain a desk, two chairs, a phone, and an Internet connection.

It is possible to use your residential address as your office, but it must be a completely separate building and it must still have the appropriate zoning. This means that most residential properties are prohibited from being used as a dealership.

man riding a self driving car
Image Credit: riopatuca, Shutterstock

Can A Felon Get A Car Dealer License In Texas?

Whether you will be granted a dealer license with a felony on your record primarily depends on the type of offense that was committed. If you have been convicted of a crime related to running a motor vehicle dealership illegally, you are unlikely to be granted a license. If your felony offense was a non-violent offense that was not related to owning or running a dealership, it likely won’t affect your application.

You can always speak to DMV staff and ask them to submit an abbreviated application. This essentially enables you to determine whether you would be granted a license before you locate and pay for business premises and other costs.

divider 1 Conclusion: How Many Cars Can You Sell In A Year In Texas?

You can sell up to four vehicles a year, in Texas, as long as you title them in your name and have used them for personal or business use before selling each one. A failure to title a vehicle in your name is a title jumping or title hopping offense and carries a financial penalty, as well as potential prison time for repeat and serious offenders. If you sell five or more vehicles in a year, you will need a dealers license, which requires appropriate property but does offer some tax benefits.

Related Reads:

Featured Image Credit: 89stocker, Shutterstock


Related posts

OUR categories

Project ideas

Hand & power tools